How noise affects effort in tournaments

• 成果类型: Article
• 署名作者: Drugov, Mikhail; Ryvkin, Dmitry
• 署名单位: New Economic School; Centre for Economic Policy Research - UK; State University System of Florida; Florida State University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.105065
• 发表日期: 2020
• 关键词: Tournament; noise; Dispersive order; Quantile stochastic dominance; entropy

摘要

It is commonly understood that making a tournament ranking process more noisy leads to a reduction in effort exerted by players in the tournament. But what exactly does it mean to have more noise? We address this question and show that the level of risk, as measured by the variance or the second-order stochastic dominance order, is not the answer, in general. For rank-order tournaments with arbitrary prizes, equilibrium effort decreases as noise becomes more dispersed, in the sense of the dispersive order. For winner-take-all tournaments, we identify a weaker version of the dispersive order we call quantile stochastic dominance, as well as other orders and entropy measures linking equilibrium effort and noise. (C) 2020 Elsevier Inc. All rights reserved.