We consider a contest between a small and a large team. On the one hand, the large team has the advantage of more people exerting effort (quantity effect). On the other hand, the large team suffers from more free riding (free-riding effect). The results show that - depending on the convexity of...

In corporate contests, employees compete for a prize. Ideally, contests induce employees to exert productive effort which increases their probability of winning. In many environments, however, employees can also improve their own ranking position by harming their colleagues. Such negative...

We discuss two incentive schemes that are frequently used in practice¡Xtournaments and piece rates. The existing literature on the comparison of these two incentive schemes has focused on the case of unlimited liability. However, real workers' wealth is typically restricted. Therefore, this...

Transferring knowledge to an agent makes him more successful or productive, which is beneficial for the principal. However, knowledge transfer also increases the agent's outside option. I identify two reasons for withholding knowledge — to reduce labor costs within a principal-agent...