Summary
In this paper, we show that contestants’ behavior in sequential-move tournaments strictly differs from the behavior in simultaneous-move ones. In a sequential-move tournament, players choose different effort levels even in the case of homogeneity, whereas in the simultaneous-move tournament homogeneous players always behave symmetrically. Moreover, in the sequential setting the first-moving player may choose a preemptively high effort level so that the second mover drops out of the competition under certain conditions. In order to avoid such behavior, the organizer of the tournament should choose a rather moderate spread between winner and loser prize as best response.
Zusammenfassung
Im vorliegenden Beitrag wird gezeigt, dass sich das Verhalten von Teilnehmern in Turnieren mit sequentieller Zugfolge deutlich von demjenigen in Standardturnieren unterscheidet, in welchen die Akteure ihre Anstrengungen simultan wählen. Zum einen entscheiden sich die Akteure im sequentiellen Fall selbst dann für unterschiedliche Anstrengungen, wenn sie homogen sind. Zum anderen kann es unter bestimmten Bedingungen dazu kommen, dass der Erstziehende eine derart präventiv hohe Anstrengung wählt, dass der nachfolgende Akteur aus dem Wettbewerb aussteigt. Um ein solches Problem zu vermeiden, sollte der Turnierveranstalter darauf achten, dass Gewinner- und Verliererpreis nicht zu stark auseinanderfallen.
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We would like to thank two anonymous referees for helpful comments. M. Kräkel is grateful for financial support by the Deutsche Forschungsgemeinschaft (DFG), project no. SFB/TR 15 (“Governance and the Efficiency of Economic Systems”).
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Jost, PJ., Kräkel, M. Preemption in rank-order tournaments. Z. Betriebswirtsch 77, 1293–1314 (2007). https://doi.org/10.1007/s11573-007-0326-7
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DOI: https://doi.org/10.1007/s11573-007-0326-7