Abstract
In promotion contests or other tournament-like situations, a principal may attach some value to the highest effort expended by an agent. We show that whenever agents interact over multiple periods, awarding a head start to one of them is optimal even with completely symmetric agents. Awarding a small head start increases maximum individual effort without decreasing aggregate effort.
Original language | English |
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Pages (from-to) | 94-97 |
Number of pages | 4 |
Journal | Economics Letters |
Volume | 149 |
DOIs | |
Publication status | Published - 2016 |