We study the role of different contract types in coordinating the joint product improvement effort of a client and a customer support center. The customer support center's costly efforts include transcribing and analyzing customer feedback, analyzing market trends, and investing in product...

Everyone remembers a plot where a disadvantaged individual facing the prospect of failure, spends more effort, turns around the game and wins unexpectedly. Most tournament theories, however, predict the opposite pattern and see the disadvantaged agent investing less effort. We show that 'turn...