The incentive effect of coarsening the competition structure in a tournament is studied. By coarsening the competition structure, we mean that coarser performance measure is used while finer information is available. Examples include letter grades or grade classes when finer numeric grades are...

The incentive effect of a handicap in a tournament competition is studied. A handicap may decrease the effort levels of the advantaged group or the disadvantaged group. However, the average effort level will always increase as long as the performance measure is informative of effort in a...