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Efficient tournaments within teams
Author(s) -
Gershkov Alex,
Li Jianpei,
Schweinzer Paul
Publication year - 2009
Publication title -
the rand journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.687
H-Index - 108
eISSN - 1756-2171
pISSN - 0741-6261
DOI - 10.1111/j.1756-2171.2008.00057.x
Subject(s) - incentive , redistribution (election) , general partnership , ranking (information retrieval) , microeconomics , business , production (economics) , industrial organization , economics , operations research , computer science , finance , engineering , political science , artificial intelligence , politics , law
We analyze incentive problems in team and partnership structures where the only available information to condition a contract on is a partial and noisy ranking which specifies who comes first in efforts among the competing partners. This enables us to ensure both first‐best efficient effort levels for all partners and the redistribution of output only among partners. Our efficiency result is obtained for a wide range of cost and production functions.