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Efficient tournaments within teams

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  • Alex Gershkov
  • Jianpei Li
  • Paul Schweinzer

Abstract

We analyze incentive problems in team and partnership structures where the only available information to condition a contract on is a partial and noisy ranking which specifies who comes first in efforts among the competing partners. This enables us to ensure both first‐best efficient effort levels for all partners and the redistribution of output only among partners. Our efficiency result is obtained for a wide range of cost and production functions.

Suggested Citation

  • Alex Gershkov & Jianpei Li & Paul Schweinzer, 2009. "Efficient tournaments within teams," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 103-119, March.
    • Handle: RePEc:bla:randje:v:40:y:2009:i:1:p:103-119
    DOI: 10.1111/j.1756-2171.2008.00057.x
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