The Effects of Financial Incentives on Women’s Performance: The Tournament Theory Applied to Female Tennis Players

The purpose of this paper is to analyze the management model of women’s professional tennis by using the theoretical framework of the tournament theory. Indeed, this sport is particularly appropriate to study the effects of financial incentives on women’s performance in the context of competitive elimination tournament. Moreover, we take into account the direct opposition between players by building two relative performance indicators. Empirical tests are conducted, by using Ordinary Least Squares method, on the whole tournaments played by the 30 best women’s tennis players, over the 2011 season. Interesting implication found is that one tournament theory principle, the incentive effect, is confirmed. In other words, an undistributed prize structure between tournament rounds increases the player performance. However, the other consequence of the tournament theory, the participative effect, is rejected because the monetary gains distributed by the tournament’s organizer (either the premium earned or the total dollar endowment) do not induce better player performance.