Structural Estimation of Rank-Order Tournament Games with Private Information

Posted: 23 Jul 2007

See all articles by Tom Vukina

Tom Vukina

North Carolina State University - Department of Agricultural & Resource Economics

Xiaoyong Zheng

North Carolina State University

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Abstract

In this article we propose and solve a game-theoretic model of a rank-order tournament with private information. Using the contract settlement data from a poultry company, we estimate a fully structural model of a symmetric Nash equilibrium of this game. We show that growers' equilibrium effort depends on four factors: the spread in piece rates between the performance brackets, the number of players in each tournament, the number of performance brackets used, and the density of growers' private shocks. We use estimates to simulate how changes in the tournament characteristics affecting equilibrium effort impact the growers' and the integrator's welfare.

Suggested Citation

Vukina, Tomislav and Zheng, Xiaoyong, Structural Estimation of Rank-Order Tournament Games with Private Information. American Journal of Agricultural Economics, Vol. 89, No. 3, pp. 651-664, August 2007, Available at SSRN: https://ssrn.com/abstract=1002120 or http://dx.doi.org/10.1111/j.1467-8276.2007.01008.x

Tomislav Vukina (Contact Author)

North Carolina State University - Department of Agricultural & Resource Economics ( email )

Box 8109
3332 Nelson Hall
Raleigh, NC 27695-8109
United States
919-515-5864 (Phone)
919-515-6268 (Fax)

Xiaoyong Zheng

North Carolina State University ( email )

Box 8109
3332 Nelson Hall
Raleigh, NC 27695-8109
United States
919-515-4543 (Phone)
919-515-6268 (Fax)

HOME PAGE: http://www4.ncsu.edu/~xzheng

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