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Tournaments and Office Politics: Evidence from a Real Effort Experiment

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  • Carpenter, Jeffrey P.

    () (Middlebury College)

  • Matthews, Peter Hans

    () (Middlebury College)

  • Schirm, John

    () (affiliation not available)

Abstract

In many environments, tournaments can elicit more effort from workers, except perhaps when workers can sabotage each other. Because it is hard to separate effort, ability and output in many real workplace settings, the empirical evidence on the incentive effect of tournaments is thin. There is even less evidence on the impact of sabotage because real world acts of sabotage are often subtle manifestations of subjective peer evaluation or "office politics." We discuss a real effort experiment in which effort, quality adjusted output and office politics are compared under piece rates and tournaments. Our results suggest that tournaments increase effort only in the absence of office politics. Competitors are more likely to sabotage each other in tournaments and, as a result, workers actually provide less effort simply because they expect to be the victims of sabotage. Adjusting output for quality with the rating of an independent auditor shrinks the incentive effect of the tournament even further since output tends to become more slipshod.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2972.

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Length: 31 pages
Date of creation: Aug 2007
Date of revision:
Publication status: published in: American Economic Review, 2010, 100 (1), 504-517
Handle: RePEc:iza:izadps:dp2972

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Keywords: tournament; sabotage; real effort; experiment;

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References

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  1. Chan, William, 1996. "External Recruitment versus Internal Promotion," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 555-70, October.
  2. Garicano, Luis & Palacios-Huerta, Ignacio, 2005. "Sabotage in Tournaments: Making the Beautiful Game a Bit Less Beautiful," CEPR Discussion Papers 5231, C.E.P.R. Discussion Papers.
  3. Christian Grund & Dirk Sliwka, 2005. "Envy and Compassion in Tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(1), pages 187-207, 03.
  4. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May.
  5. Nalbantian, Haig R & Schotter, Andrew, 1997. "Productivity under Group Incentives: An Experimental Study," American Economic Review, American Economic Association, vol. 87(3), pages 314-41, June.
  6. Drago, Robert & Garvey, Gerald T, 1998. "Incentives for Helping on the Job: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 1-25, January.
  7. Christine Harbring & Bernd Irlenbusch, 2005. "Incentives in Tournaments with Endogenous Prize Selection," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(4), pages 636-, December.
  8. Frans van Dijk & Joep Sonnemans & Frans van Winden, 2000. "Incentive Systems in a Real Effort Experiment," CESifo Working Paper Series 272, CESifo Group Munich.
  9. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
  10. Harbring, Christine & Irlenbusch, Bernd, 2005. "How Many Winners Are Good to Have? On Tournaments with Sabotage," IZA Discussion Papers 1777, Institute for the Study of Labor (IZA).
  11. Falk, Armin & Ichino, Andrea, 2003. "Clean Evidence on Peer Pressure," CEPR Discussion Papers 3834, C.E.P.R. Discussion Papers.
  12. Brüggen, Alexander & Strobel, Martin, 2007. "Real effort versus chosen effort in experiments," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18489, Maastricht University.
  13. Kong-Pin Chen, 2003. "Sabotage in Promotion Tournaments," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(1), pages 119-140, April.
  14. James Konow, 2000. "Fair Shares: Accountability and Cognitive Dissonance in Allocation Decisions," American Economic Review, American Economic Association, vol. 90(4), pages 1072-1091, September.
  15. Harbring, Christine & Irlenbusch, Bernd, 2004. "Incentives in Tournaments with Endogenous Prize Selection," IZA Discussion Papers 1340, Institute for the Study of Labor (IZA).
  16. Harbring, Christine & Irlenbusch, Bernd, 2008. "How many winners are good to have?: On tournaments with sabotage," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 682-702, March.
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Citations

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Cited by:
  1. Joeri Sol, 2010. "Peer Evaluation: Incentives and Co-Worker Relations," Tinbergen Institute Discussion Papers 10-055/1, Tinbergen Institute.
  2. Schunk, Daniel & Winter, Joachim, 2004. "The Relationship Between Risk Attitudes and Heuristics in Search Tasks: A Laboratory Experiment," Sonderforschungsbereich 504 Publications 04-23, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  3. Charness, Gary & Masclet, David & Villeval, Marie Claire, 2013. "The Dark Side of Competition for Status," University of California at Santa Barbara, Economics Working Paper Series qt3858888w, Department of Economics, UC Santa Barbara.
  4. Loukas Balafoutas & Florian Lindner & Matthias Sutter, 2012. "Sabotage in tournaments: Evidence from a natural experiment," Working Papers 2012-01, Faculty of Economics and Statistics, University of Innsbruck.
  5. Loukas Balafoutas & Glenn Dutcher & Florian Lindner & Dmitry Ryvkin, 2012. "The optimal allocation of prizes in tournaments of heterogeneous agents," Working Papers 2012-08, Faculty of Economics and Statistics, University of Innsbruck.
  6. Christiane Schwieren & Doris Weichselbaumer, 2008. "Does competition enhance performance or cheating? A laboratory experiment," NRN working papers 2008-05, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  7. Brice Corgnet & Roberto Hernán-González & Stephen Rassenti, 2011. "Real Effort, Real Leisure and Real-time Supervision: Incentives and Peer Pressure in Virtual Organizations," Working Papers 11-05, Chapman University, Economic Science Institute.
  8. Nieken, Petra & Sliwka, Dirk, 2008. "Risk-Taking Tournaments: Theory and Experimental Evidence," IZA Discussion Papers 3400, Institute for the Study of Labor (IZA).
  9. Christopher Cotton & Frank McIntyre & Joseph Price, 2010. "Causes of Gender Differences in Competition: Theory and Evidence," Working Papers 2010-19, University of Miami, Department of Economics.

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