A contest is a situation in which individuals expend irretrievable resources to win valuable prize(s). ''Sabotage'' is a deliberate and costly act of damaging a rival's likelihood of winning the contest. Sabotage can be observed in, e.g., sports, war, promotion tournaments, and political or marketing campaigns. In this article, we provide a model of, and different perspectives on, such sabotage activities and review the economics literature analyzing the act of sabotage in contests. We discuss the theories and evidence emphasizing the means of sabotage, why sabotage occurs, and the effects of sabotage on individual contestants and on overall welfare, with possible means of reducing sabotage. We note that most sabotage activities are aimed at the ablest contestant, the possibility of sabotage reduces productive effort exerted by the contestants, and sabotage may lessen the effectiveness of public policies, such as affirmative action, or information revelation in contests. We discuss the different policies a designer might use to counteract sabotage. We conclude by pointing out some areas of future research.

In this paper, we address the problem of sabotage in tournaments with heterogeneous contestants. In a first step, we develop a formal model, which yields the prediction that favorites exert higher productive effort, while underdogs are more tempted to engage in destructive actions (sabotage). This is because favorites have a higher return on productive effort and both types of effort are substitutes. In a second step, we use data from German professional soccer to test this prediction. In line with the model, we find that favorite teams win more tackles in a fair way, while underdog teams commit more fouls.

We analyze the optimal design of rank-order tournaments with heterogeneous workers. If tournament prizes do not di¤er between the workers (uniform prizes), as in the previous tournament literature, the outcome will be ine¢ cient. In the case of limited liability, the employer may bene…t from implementing more than …rst-best e¤ort. We show that the employer can use individual prizes that satisfy a self-commitment condition and induce e¢ cient incentives at the same time, thus solving a fundamental dilemma in tournament theory. Individual prizes exhibit two major advantages -they allow the extraction of worker rents and the adjustment of individual incentives, which will be important for the employer if he cannot rely on handicaps.

Feedback in Tournaments under Commitment Problems:Theory and Experimental Evidence *In this paper, we analyze a principal's optimal feedback policy in tournaments. We close a gap in the literature by assuming the principal to be unable to commit to a certain policy at the beginning of the tournament. Our analysis shows that in equilibrium the principal reveals intermediate information regarding the agents' previous performances if these performances are not too different. Moreover, we investigate a situation where the principal is not able to credibly communicate her information. Having presented our formal analysis, we test these results using data from laboratory experiments. The experimental findings provide some support for the model.JEL Classification: C91, D83, J33, M52

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We consider a situation where an agent's effort is monitored by a supervisor who cares for the agent's well-being. This is modeled by incorporating the agent's utility into the utility function of the supervisor. The first-best solution can be implemented even if the supervisor's preferences are unknown. The corresponding optimal contract is similar to what we observe in practice: The supervisor's wage is constant and independent of his report. It induces one type of supervisor to report the agent's performance truthfully, while all others report favorably independent of performance. This implies that overstated performance (leniency bias) may be the outcome of optimal contracts under informational asymmetries.