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The Journal of Law, Economics, and Organization V19 I1
© 2003 Oxford University Press

Original Article

Sabotage in Promotion Tournaments

Kong-Pin Chen

Academia Sinica and National Taiwan University

Abstract

This article studies the nature, determinants, and impact of "negative" activities in organizations. In competing for promotion, the members in organizations can work not only to enhance their own performances, but also to "sabotage" their opponent's performances. It is worthwhile for them to engage in negative activities because promotion is generally based on relative, rather than absolute, performance, and its nature is winner take all. I find that abler members are subject to more attacks. Consequently, not only is there a double inefficiency in effort, but also members of the highest caliber might not have the best chance of being promoted. Finally, I discuss several institutional designs that might help to reduce the influence of negative activities.


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