Abstract
In tournaments, only the relative performance of agents is important. Therefore, the agents have an incentive to collude by jointly deviating to low effort levels. Previous papers on collusion have proposed to make the tournament asymmetric to prevent agents from colluding. However, by allowing side payments between the agents and focusing on implicit enforcement of collusion, the current study demonstrates that this is not true. Often, the principal prefers to hire homogeneous agents to make collusions less stable.
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