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- Title
A PRIMER ON CARDINAL VERSUS ORDINAL TOURNAMENTS.
- Authors
Tsoulouhas, Theofanis
- Abstract
This paper fills in a gap in the tournament literature by developing a framework that can be used to analyze both cardinal and ordinal tournaments, as well as piece rates. The analysis aims to obtain a Pareto ranking of cardinal versus ordinal tournaments, which is an open question in the literature. The analysis shows that, surprisingly, cardinal tournaments are superior to ordinal tournaments. The rationale is that, by utilizing all the available information more efficiently, cardinal tournaments allow the principal to implement higher power incentives, which makes them superior even though they restrict the form of the contract more than ordinal tournaments. ( JEL D82, D21)
- Subjects
CONTESTS; PAY for performance; PERFORMANCE evaluation; RISK -- Mathematical models
- Publication
Economic Inquiry, 2015, Vol 53, Issue 2, p1224
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.12168