This paper extends the discussion of simultaneous-move tournaments by focusing on the analysis of heterogeneous instead of homogeneous contestants. We show that the principal will not implement first-best efforts even though the agents are risk neutral and not limited in wealth, and despite the...

I introduce a concept of emotions that emerge when workers evaluate their individual performances or when they compare their own performances with those of co-workers. I analyze the interplay of emotions and incentives by focusing on a certain scheme of worker compensation that is frequently...