The incentive effect of a handicap in a tournament competition is studied. A handicap may decrease the effort levels of the advantaged group or the disadvantaged group. However, the average effort level will always increase as long as the performance measure is informative of effort in a specific sense: the monotone likelihood ratio property.
- Effort Incentive
- Monotone likelihood ratio Property
ASJC Scopus subject areas
- Economics and Econometrics