Feedback in Tournaments Under Commitment Problems: Theory and Experimental Evidence
40 Pages Posted: 21 Nov 2007
Date Written: October 2007
Abstract
In this paper, we analyze a principal's optimal feedback policy in tournaments. We close a gap in the literature by assuming the principal to be unable to commit to a certain policy at the beginning of the tournament. Our analysis shows that in equilibrium the principal reveals intermediate information regarding the agents' previous performances if these performances are not too different. Moreover, we investigate a situation where the principal is not able to credibly communicate her information. Having presented our formal analysis, we test these results using data from laboratory experiments. The experimental findings provide some support for the model.
Keywords: tournament, commitment problems, feedback, experiment
JEL Classification: C91, D83, J33, M52
Suggested Citation: Suggested Citation
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