Head Starts in Dynamic Tournaments?
9 Pages Posted: 16 Dec 2019
Date Written: 2016
In promotion contests or other tournament-like situations, a principal may attach some value to the highest effort expended by an agent. We show that whenever agents interact over multiple periods, awarding a head start to one of them is optimal even with completely symmetric agents. Awarding a small head start increases maximum individual effort without decreasing aggregate effort.
Keywords: Personnel Economics, Contests, Tournaments, Head Start
JEL Classification: D72, D82, L12
Suggested Citation: Suggested Citation