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Feedback in Tournaments under Commitment Problems: Experimental Evidence
Author(s) -
Gürtler Oliver,
Harbring Christine
Publication year - 2010
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1530-9134.2010.00269.x
Subject(s) - commit , competitor analysis , tournament , principal (computer security) , ex ante , information asymmetry , asymmetry , microeconomics , economics , mathematical economics , computer science , mathematics , combinatorics , physics , management , operating system , database , quantum mechanics , macroeconomics
We theoretically as well as experimentally analyze tournaments in which one of the agents leads over the other before entering the tournament, that is, in which one of the competitors benefits from a head start. The principal may decide upon informing the agents about the degree of this asymmetry. She cannot commit to giving feedback ex ante or not and, thus, chooses the strategy that is optimal for her ex post. In equilibrium, the principal reveals information if the asymmetry is not too large. Our experimental findings qualitatively confirm our theoretical prediction. Moreover, behavior of the principal and the agents is well aligned to each other .