Interim Rank, Risk Taking, and Performance in Dynamic Tournaments
AbstractWe empirically study the impact of interim rank on risk taking and performance using data on professionals competing in tournaments for large rewards. As we observe both the intended action and the performance of each participant, we can measure risk taking and performance separately. We present two key findings. First, risk taking exhibits an inverted-U relationship with interim rank. Revealing information on relative performance induces individuals trailing just behind the interim leaders to take greater risks. Second, competitors systematically underperform when ranked closer to the top, despite higher incentives to perform well. Disclosing information on relative ranking hinders interim leaders.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 120 (2012)
Issue (Month): 4 ()
Pages: 782 - 813
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JPE/
Other versions of this item:
- Christos Genakos & Mario Pagliero, 2011. "Interim Rank, Risk Taking and Performance in Dynamic Tournaments," Carlo Alberto Notebooks 196, Collegio Carlo Alberto.
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
- M50 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - General
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Subhasish M. Chowdhury & Oliver Gurtler, 2013. "Sabotage in Contests: A Survey," University of East Anglia Applied and Financial Economics Working Paper Series 051, School of Economics, University of East Anglia, Norwich, UK..
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.