The Optimality of Heterogeneous Tournaments

We investigate the effect of employee heterogeneity on the incentive to put forth effort in a market-based tournament. Employers use the tournament's outcome to estimate employees' abilities and accordingly condition their wage offers. Employees put forth effort, because by doing so they increase the probability of outperforming the rival, thereby increasing their ability assessment and thus the wage offer. We demonstrate that the tournament outcome provides more information about employees' abilities in case they are heterogeneous. Thus, employees get a higher incentive to affect the tournament outcome, and employers find it optimal to hire heterogeneous contestants

The nature of the farm: contracts, risk, and organization in agriculture, by Allen, D. W. and Lueck, D. MIT Press: Cambridge and London, 2002, viii + 258 pp., USD 35.00 (cloth)

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Les contrats de production dans l'agriculture américaine. Une caractérisation de la recherche empirique actuelle

The contracts of production in the american agriculture - While the production under contract used to hold a significant place in the American agriculture during many years, economists have recently shown a renewal of relevance of the study and the understanding of this phenomenon. The purpose of this essay is to define the existing empirical research concerning the production under contract in the American agriculture and to introduce some research issues for forthcoming studies.Alors même que la production sous contrat avait tenu une place importante dans l'agriculture américaine durant de longues années, les économistes ont récemment montré un regain d'intérêt pour l'étude et la compréhension de ce phénomène. L'objet de cetarticle est de caractériser la recherche empirique existante concernant la production sous contrat dans l'agriculture américaine et de suggérer des pistes de réflexion pour des études à venir.R. Knoeber Charles. Les contrats de production dans l'agriculture américaine. Une caractérisation de la recherche empirique actuelle. In: Économie rurale. N°259, 2000. pp. 3-15

Golden Parachutes, Shark Repellents, and Hostile Tender Offers.

A common view of golden parachutes and shark repellents is that they are designed by management to insulate itself from the discipline imposed by the market for corporate control and so are harmful to shareholders. This paper offers an alternative view that these devicesare beneficial to shareholders because they allow better contracting between manager and shareholders. Evidence on the incidence of goldenparachutes and on the compensation-tenure relationship for managers of golden parachute firms supports the alternative view. Copyright 1986 by American Economic Association.