Structural Estimation of Rank‐Order Tournament Games with Private Information

14 Pages Posted: 24 Apr 2020

See all articles by Tom Vukina

Tom Vukina

North Carolina State University - Department of Agricultural & Resource Economics

Xiaoyong Zheng

North Carolina State University

Multiple version iconThere are 2 versions of this paper

Date Written: August 2007

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.

Keywords: private information, production contracts, rank-order tournaments, structural estimation

Suggested Citation

Vukina, Tomislav and Zheng, Xiaoyong, Structural Estimation of Rank‐Order Tournament Games with Private Information (August 2007). American Journal of Agricultural Economics, Vol. 89, Issue 3, pp. 651-664, 2007, Available at SSRN: https://ssrn.com/abstract=3583756 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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