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The Effects of Prize Spread and Noise in Elimination Tournaments: A Natural Field Experiment
- Source :
- Journal of Labor Economics, 33(3), 521-569. University of Chicago Press, Journal of Labor Economics, 33(3), 521-569. University of Chicago
- Publication Year :
- 2015
- Publisher :
- University of Chicago Press, 2015.
-
Abstract
- This discussion paper led to a publication in the Journal of Labor Economics . We conduct a field experiment in a large retail chain to test basic predictions of tournament theory regarding prize spread and noise. A random subset of the 208 stores participates in two-stage elimination tournaments. Tournaments differ in the distribution of prize money across winners of the first and second round of the tournament. As predicted by theory, we find that a more convex prize spread increases performance in the second round at the expense of first-round performance, although the magnitude of these effects is small. Moreover, the treatment effect is significantly larger for stores that historically have relatively stable performance as compared to stores with more noisy performance.
- Subjects :
- PERFORMANCE FEEDBACK
Economics and Econometrics
Labour economics
INFORMATION
COMPETITION
Natural field
RISK-TAKING
EMPIRICAL-ANALYSIS
PROMOTIONS
Econometrics
Treatment effect
Tournament
Mathematics
CONTRACTS
Performance feedback
jel:C93
jel:M51
INCENTIVES
CONTESTS
COMPENSATION
Noise
jel:M52
Industrial relations
Risk taking
Elimination tournaments, Incentives, Prize spread, Performance measurement, Field experiment
Tournament theory
Subjects
Details
- ISSN :
- 15375307 and 0734306X
- Volume :
- 33
- Database :
- OpenAIRE
- Journal :
- Journal of Labor Economics
- Accession number :
- edsair.doi.dedup.....b0683483e23767c106b612fcb8d59619