Individuals faced by a tournament can oftentimes not only choose their effort level, but also the risk level of their strategy. There are some theoretical contributions on risk taking in tournaments, which mainly point out disadvantages with respect to exerted effort. Empirical evidence is rare....

In this paper, firms engage in rent seeking in order to be assigned a governmental contract. We analyze how a change in the contract length affects the firms' rent-seeking behavior. A longer contract leads to more rent seeking at a contract assignment stage, as the firms value the contract...

The property-rights approach to the theory of the firm is extended by introducing distorted signals of the parties.investments. Investment incentives are then given in two ways, by allocating ownership rights and by tying pay to the signal realization. Optimal incentive strength, that is, the...

In this paper, a promotion tournament is considered, where, at the beginning of the tournament, it is unknown how long the tournament lasts. Further, the promotion decision is based on the assessments of a supervisor with imperfect recall. In line with psychological research, the supervisor is...

In this paper, a principal's decision between delegating two tasks or handling one of the two tasks herself is analyzed. We assume that the principal uses both, formal contracts and informal agreements sustained by the value of future relationships (relational contracts) as incentive device. It...

In this paper, a group contest is analyzed, where the groups are allowed to determine their sharing rules either sequentially or simultaneously. It is found that in case the more numerous group determines its sharing rule prior to the smaller group, rent dissipation in the group contest is...

This paper addresses the selection problem in promotion tournaments. I consider a situation with heterogeneous employees and ask whether an employer might be interested in repeating a promotion tournament. On the one hand, this yields a reduction in uncertainty over the employees' abilities. On...

In this paper a tournament between teams (a collective tournament) is analyzed, where each contestant may spend productive effort in order to increase his team's performance or sabotage the members of the opponent team. It is shown that sabotaging the weaker members of a team always decreases...