Positive self-image in tournaments
AbstractThis paper analyzes the implications of worker overestimation of productivity for firms in which incentives take the form of tournaments. Each worker overestimates his productivity but is aware of the bias in his opponent’s self-assessment. The manager of the firm, on the other hand, correctly assesses workers’ productivities and self-beliefs when setting tournament prizes. The paper shows that, under a variety of circumstances, firms make higher profits when workers have positive self-image than if workers do not. By contrast, workers’ welfare declines due to their own misguided choices.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3140.
Date of creation: 10 Nov 2003
Date of revision: 27 Feb 2007
Self-Image; Tournaments; Behavioral Economics;
Other versions of this item:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
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