Preemptive Behaviour in Sequential Tournaments

Abstract

Rank-order tournaments are usually modeled simultaneously. However, real tournaments are often sequentially. We show that agents' strategic behavior significantly differs in sequential tournaments compared to simultaneous tournaments. In a sequential tournament, under certain conditions the first acting agent chooses a preemptively high effort so that the following agent gives up. In general, the principal will prefer simultaneous tournaments in which preemptive behavior is impossible.

Keywords: Preemptive behavior, rank-order tournaments, sequential tournaments

JEL Classification: J31, J33, J41