Fatigue in dynamic tournaments
AbstractEmployee overwork and fatigue are a concern of managers in many organizations, as they may increase health and safety risks and decrease productivity. The problem is especially severe in competitive environments where compensation and promotions are awarded, explicitly or implicitly, on the basis of relative performance. In this paper, we propose a theory for, and study experimentally, the phenomenon of fatigue in dynamic contests aimed to mimic such settings. Theoretically, we find that if managers wish to avoid overwork, for example due to its negative impact on productivity, they should let their employees compete for promotion longer, with multiple intermediate performance evaluation stages. Experimentally, we find that subjects react strongly to changes in the environment related to fatigue and follow the comparative statics of equilibrium predictions. At the same time, within a given environment subjects behave as if they are unaware of the deteriorating effect of fatigue on their competitiveness. The results suggest that nonspecific information on consequences of fatigue is more effective than targeted information on how fatigue affects an employee’s chances of winning the competition.
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Bibliographic InfoPaper provided by Department of Economics, Florida State University in its series Working Papers with number wp2009_06_03.
Date of creation: Jun 2009
Date of revision:
Other versions of this item:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- I10 - Health, Education, and Welfare - - Health - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-17 (All new papers)
- NEP-CBE-2009-07-17 (Cognitive & Behavioural Economics)
- NEP-EXP-2009-07-17 (Experimental Economics)
- NEP-MIC-2009-07-17 (Microeconomics)
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