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Title:Splitting Leagues PDF Logo
Authors:Kräkel, Matthias
Issue Date:2003
Series/Report no.:Bonn econ discussion papers 2003,6
Abstract:Splitting leagues or tournaments seems to be puzzling when agents are homogeneous and splitting leads to a negative competition effect. However, it can be shown that the principal can nevertheless benefit from splitting. First, splitting can be used as a divide-and-rule strategy by the principal to create additional incentives when collusion among the agents is possible. Second, splitting leagues gives the principal the opportunity to introduce promotions and relegations between nested tournaments (i.e., tournaments that are intertemporally linked), which also enhances incentives.
Subjects:collusion
leagues
promotion
relegation
tournaments
JEL:M5
J4
J3
Document Type:Working Paper
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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