We compare welfare effects of tournaments and piece rates in contracts with heterogeneous ability agents and demonstrate that tournaments that mix players of unequal abilities create league composition effect. When leagues are fixed and the time horizon sufficiently long, piece rates improve...

In this article we propose and solve a game-theoretic model of a rank-order tournament with private information. Using the contract settlement data from a poultry company, we estimate a fully structural model of a symmetric Nash equilibrium of this game. We show that growers' equilibrium effort...