INTERIM PERFORMANCE FEEDBACK IN MULTISTAGE TOURNAMENTS: THE OPTIMALITY OF PARTIAL DISCLOSURE

Abstract. Workers competing in a tournament for a given prize, say a promotion, often perform sequentially in multiple stages. When the \u85rm is privately informed about the workersperformance, it can sharpen incentives by strategically disclosing the intermediate results. But the policies that enhance \u85nal-stage e¤ort may dampen incentives at the inter-mediate stage. In our model, the optimal disclosure policy has a simple form: disclose only if all workers perform poorly. This result o¤ers a novel justi\u85cation for partial disclosure in performance feedback. Also, it is in contrast with the existing literature that focuses on the extreme policies of full disclosureand no disclosure. 1