The League Composition Effect in Tournaments with Heterogeneous Players: An Empirical Analysis of Broiler Contracts

摘要: We compare welfare effects of tournaments and piece rates in contracts with heterogeneous ability agents demonstrate that mix players unequal abilities create a league composition effect. When leagues are fixed the time horizon sufficiently long, improve over tournaments. Using contract production data for broiler chickens, we estimate variances growers’ abilities, common shock, grower’s idiosyncratic shock. Growers' heterogeneous, shocks significant. Leagues disintegrate rapidly time, suggesting tournament offer more than rates.