Within an organization, a bounded rational principal organizes a promotion
contest based on a sequence of rests regarding candidates' relative perform
ances. We assume the principal to suffer from limited ability ru rank the p
erformances, only identifying the best in each test. Furthermore, he satisf
ies the expected profit from promotion, designing the contest such that exp
ected gains do not decrease with the information generated by additional te
sts. Then, mentoring is shown to improve the information about candidates'
ability when the principal offers help to the current best candidate provid
ed by a manager promoted after a similar contest. (C) 2001 Elsevier Science
B.V. All rights reserved.