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Title:Information in tournaments under limited liability PDF Logo
Authors:Budde, Jörg
Issue Date:2005
Series/Report no.:Bonn econ discussion papers 2005,21
Abstract:The problem of designing tournament contracts under limited liability and alternative performance measures is considered. Under risk neutrality, only the best performing agent receives an extra premium if the liability constraint becomes binding. Under risk aversion, more than one prize is awarded. In both situations, performance measures can be ranked if their likelihood ratio distribution functions differ by a mean preserving spread. The latter result is applied to questions of contest design and more general forms of relative performance payment.
Subjects:contest
information
likelihood ratio distribution
tournament
JEL:D82
M52
M54
Document Type:Working Paper
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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