Dynamically Sabotage-Proof Tournaments

• 成果类型: Article
• 署名作者: Ishida, Junichiro
• 署名单位: University of Osaka
• 刊物名称: JOURNAL OF LABOR ECONOMICS
• ISSN/ISSBN: 0734-306X
• DOI: 10.1086/664945
• 发表日期: 2012
• 页码: 627-655
• 关键词: external recruitment; internal promotion; FIRMS; wage

摘要

This article explores the consequences of sabotage for the design of incentive contracts. The possibility of sabotage gives rise to a dynamic concern, similar to the Ratchet effect, which distorts the agents' incentives. We first show that the mere possibility of sabotage may make it impossible to implement the first-best effort, and we then offer two distinct incentive schemes, fast track and late selection, to circumvent this problem. The present model offers a mechanism through which these two schemes arise in a unified framework.