By the well established tournament literature, incomplete information regarding the employees' productivity is … conditions under which the principal has an incentive to create a tournament that determines the promoted employee. We then … in the tournament. In particular, we specify the conditions that ensure that the most productive employee (the natural …

A standard tournament contract specifies only tournament prizes. If agents' performance is measured on a cardinal scale …, the principal can complement the tournament contract by a gap which defines the minimum distance by which the best … performing agent must beat the second best to receive the winner prize. We analyze a tournament with two risk averse agents …