Sabotage in Tournaments: Evidence from a Laboratory Experiment
AbstractAlthough relative performance schemes are pervasive in organizations, reliable empirical data on induced sabotage behavior are almost nonexistent. We study sabotage in repeated tournaments in a controlled laboratory experiment and observe that effort and sabotage are higher for higher wage spreads. Additionally, we find that also in the presence of tournament incentives, agents react reciprocally to higher wages by exerting higher effort. Destructive activities are reduced by explicitly calling them by their name "sabotage." Communication among principal and agents can curb sabotage when they agree on flat prize structures and increased output. If sabotage is not possible, the principals choose tournament incentives more often. This paper was accepted by Peter Wakker, decision analysis.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 57 (2011)
Issue (Month): 4 (April)
decision analysis; applications; organizational studies; decision making; motivation; incentives;
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- Loukas Balafoutas & Florian Lindner & Matthias Sutter, 2012.
"Sabotage in tournaments: Evidence from a natural experiment,"
2012-01, Faculty of Economics and Statistics, University of Innsbruck.
- Loukas Balafoutas & Florian Lindner & Matthias Sutter, 2012. "Sabotage in Tournaments: Evidence from a Natural Experiment," Kyklos, Wiley Blackwell, vol. 65(4), pages 425-441, November.
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- Sheremeta, Roman, 2013.
"Overbidding and Heterogeneous Behavior in Contest Experiments,"
44124, University Library of Munich, Germany.
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- Curtis R. Price & Roman M. Sheremeta, 2012. "Endowment Origin, Demographic Effects and Individual Preferences in Contests," Working Papers 12-07, Chapman University, Economic Science Institute.
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