IZA DP No. 1844: Tournaments and Multiple Productive Inputs: The Case of Performance Enhancing Drugs
In this paper I consider the desirability of drugs that enhance cognitive abilities in the context of tournaments that are used as optimal labor contracts as in Lazear and Rosen (1981). Such drugs reduce the number of voluntary participants in a tournament, but increase individual and total output. If the tournament is optimally designed, welfare is higher if drugs are available and used.