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Cheating and Enforcement in Asymmetric Rank‐Order Tournaments
Author(s) -
Stowe C. Jill,
Gilpatric Scott M.
Publication year - 2010
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.4284/sej.2010.77.1.1
Subject(s) - cheating , audit , incentive , order (exchange) , ranking (information retrieval) , enforcement , position (finance) , rank (graph theory) , deterrence (psychology) , computer science , business , microeconomics , econometrics , computer security , economics , accounting , mathematics , psychology , social psychology , law and economics , political science , artificial intelligence , finance , combinatorics , law
In rank‐order tournaments, undesirable but output‐enhancing activities, such as cheating, may occur. Cheating may be especially tempting when one player has an advantage over another. We show that when audit probabilities are low (high), the leading (trailing) player has more incentive to cheat. Furthermore, we show that “correlated” audits are more effective at decreasing the frequency of cheating than independent audits. Finally, we show that differential monitoring schemes, where contestants are audited based on either their initial position or final ranking, more efficiently achieve full deterrence than schemes that monitor contestants with equal probability.