Losing to Win: Tournament Incentives in the National Basketball Association
AbstractThe focus of tournament models has been rank-order compensation schemes whereby participants receive higher payments for higher relative performance, either incrementally or winner-takes-all. Our research focuses on a unique tournament that offers rewards for both winning and losing, specifically the National Basketball Association's regularly scheduled season of games. We examine three NBA seasons to determine whether team performance responded to changes in the underlying tournament incentives provided by the NBA's introduction and restructuring of the lottery system to determine draft order. Our results yield strong evidence that NBA teams are more likely to lose when incentives to lose are present.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Labor Economics.
Volume (Year): 20 (2002)
Issue (Month): 1 (January)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The NFL Salary Cap and an Incentive to Not Win
by Phil Miller in Market Power on 2008-04-07 15:22:00
- Australian Rules Football and Perverse Incentives
by Phil Miller in Market Power on 2013-11-19 20:08:34
- Mueller-Langer, Frank & Andreoli-Versbach, Patrick, 2013. "Leading-effect vs. Risk-taking in Dynamic Tournaments: Evidence from a Real-life Randomized Experiment," Discussion Papers in Economics 15452, University of Munich, Department of Economics.
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- Grund, Christian & Höcker, Jan & Zimmermann, Stefan, 2010. "Risk Taking Behavior in Tournaments: Evidence from the NBA," IZA Discussion Papers 4812, Institute for the Study of Labor (IZA).
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