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Preemptive behavior in sequential-move tournaments with heterogeneous agents

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  • P.-J. Jost
  • M. Kräkel

Abstract

Rank-order tournaments are usually modeled simultaneously. However, real tournaments are often sequential. We show that agents' strategic behavior in sequential-move tournaments significantly differ from the one in simultaneous-move tournaments: In a sequential-move tournament with heterogeneous agents, the first acting agent may choose a preemptively high effort so that the following agent gives up. The principal is able to prevent preemptive behavior in equilibrium by choosing a sufficiently small spread between winner and loser prize. Copyright Springer-Verlag Berlin/Heidelberg 2005

Suggested Citation

  • P.-J. Jost & M. Kräkel, 2005. "Preemptive behavior in sequential-move tournaments with heterogeneous agents," Economics of Governance, Springer, vol. 6(3), pages 245-252, November.
    • Handle: RePEc:spr:ecogov:v:6:y:2005:i:3:p:245-252
    DOI: 10.1007/s10101-004-0088-4
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    Cited by:

    1. Gürtler, Oliver, 2006. "Contractual Incentive Provision and Commitment in Rent-Seeking Contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 100, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Timothy Mathews & Tim Blumentritt, 2015. "A sequential choice model of family business succession," Small Business Economics, Springer, vol. 45(1), pages 15-37, June.
    3. Bilen, Eren & Matros, Alexander, 2023. "The Queen's Gambit: Explaining the superstar effect using evidence from chess," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 307-324.
    4. Ricardo Manuel Santos, 2023. "Effects of psychological pressure on first‐mover advantage in competitive environments: Evidence from penalty shootouts," Contemporary Economic Policy, Western Economic Association International, vol. 41(2), pages 354-369, April.
    5. Brian Hill, 2014. "The Heat Is On," Journal of Sports Economics, , vol. 15(4), pages 315-337, August.
    6. Brady, Ryan R. & Insler, Michael A., 2019. "Order of play advantage in sequential tournaments: Evidence from randomized settings in professional golf," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 79(C), pages 79-92.
    7. Jost, Peter-J. & Kräkel, Matthias, 2008. "Human capital investments in asymmetric corporate tournaments," Journal of Economics and Business, Elsevier, vol. 60(4), pages 312-331.

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    More about this item

    Keywords

    Preemption; tournaments;

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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