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Structural Estimation of Rank-Order Tournament Games with Private Information

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  • Tomislav Vukina
  • Xiaoyong Zheng

Abstract

In this article we propose and solve a game-theoretic model of a rank-order tournament with private information. Using the contract settlement data from a poultry company, we estimate a fully structural model of a symmetric Nash equilibrium of this game. We show that growers' equilibrium effort depends on four factors: the spread in piece rates between the performance brackets, the number of players in each tournament, the number of performance brackets used, and the density of growers' private shocks. We use estimates to simulate how changes in the tournament characteristics affecting equilibrium effort impact the growers' and the integrator's welfare. Copyright 2007, Oxford University Press.

Suggested Citation

  • Tomislav Vukina & Xiaoyong Zheng, 2007. "Structural Estimation of Rank-Order Tournament Games with Private Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 651-664.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:3:p:651-664
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01008.x
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    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
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    Cited by:

    1. Grau, Nicolás, 2018. "The impact of college admissions policies on the academic effort of high school students," Economics of Education Review, Elsevier, vol. 65(C), pages 58-92.

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