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Career Prospects and Effort Incentives: Evidence from Professional Soccer

Author

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  • Jeanine Miklós-Thal

    () (Simon Business School, University of Rochester, Rochester, New York 14627)

  • Hannes Ullrich

    () (Department of Firms and Markets, DIW Berlin, 10108 Berlin, Germany; and Department of Business Administration, University of Zurich, CH-8032 Zurich, Switzerland)

Abstract

It is difficult to test the prediction that future career prospects create implicit effort incentives because researchers cannot randomly “assign” career prospects to economic agents. To overcome this challenge, we use data from professional soccer, where employees of the same club face different external career opportunities depending on their nationality. We test whether the career prospect of being selected to a Euro Cup national team affects players’ pre-cup performances, using nationals of countries that did not participate in the Euro Cup as a control group. We find that the Euro Cup career prospect has positive effects on the performances of players with intermediate chances of being selected to their national team, but negative effects on the performances of players whose selection is very probable. Our findings have implications for the incentive effects of within-firm promotions and of external career opportunities. This paper was accepted by John List, behavioral economics.

Suggested Citation

  • Jeanine Miklós-Thal & Hannes Ullrich, 2016. "Career Prospects and Effort Incentives: Evidence from Professional Soccer," Management Science, INFORMS, vol. 62(6), pages 1645-1667, June.
  • Handle: RePEc:inm:ormnsc:v:62:y:2016:i:6:p:1645-1667
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    File URL: http://dx.doi.org/10.1287/mnsc.2015.2211
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    References listed on IDEAS

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    Cited by:

    1. Rosa Ferrer Zarzuela, 2015. "The effect of lawyers' career concerns on litigation," Economics Working Papers 1496, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2016.
    2. Besters, Lucas, 2018. "Economics of professional football," Other publications TiSEM d9e6b9b7-a17b-4665-9cca-1, Tilburg University, School of Economics and Management.
    3. Hannes Ullrich, 2014. "Leistungsanreize in Unternehmen," DIW Roundup: Politik im Fokus 32, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    incentives; effort; career concerns; reputation; contests; tournaments; promotions;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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