The threat of sabotage and collusion in tournaments
摘要
In long-term tournament settings, low-effort collusion, namely, when both agents exert no effort at any stage, tends to emerge as a stable outcome. This study challenges this perspective by introducing sabotage as a strategic option for agents and examining its impact on their collusive behavior. We also examine the extent to which symmetric and asymmetric tournament structures influence agents’ decisions. In our model, exerting sabotage effort is a Nash equilibrium in a stage game. However, if the tournament is repeated, agents may choose between two types of collusion, namely, low-effort collusion and high-effort collusion, the latter of which involves both agents exerting productive effort until one deviates to sabotage effort. Our findings reveal that the presence of sabotage deters low-effort collusion, as the costs of being sabotaged incentivize agents to sustain high-effort collusion instead. This result suggests that incorporating sabotage as a feasible strategic option in tournament design, particularly within symmetric structures, may serve as a natural deterrent against low-effort collusion, ultimately raising productivity.