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The Response of Workers to Wages in Tournaments

Author

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  • Michael T. Maloney

    (Clemson University, maloney@clemson.edu)

  • Robert E. McCormick

    (Clemson University, sixmile@clemson.edu)

Abstract

The authors examine labor supply using 1,426 responses of individual runners to prizes in open invitational foot races. The data are used to decompose the overall market response of higher prizes into two components based on the basic tournament model. First, an entry effect exists in which higher wages attract more highly skilled runners to participate. Second, the spread between prizes incites runners individually to work harder. This second effect is detected across the entire sample and for individuals measured against their own average performance. The authors also examine the supply elasticities between the sexes. As a group, women respond more to higher wages than men in both the entry and individual effort dimensions. Also, the more concentrated the prize money in a race, the higher the revealed effort level by the runners. The authors find that the tournament nature of competition has important incentive effects.

Suggested Citation

  • Michael T. Maloney & Robert E. McCormick, 2000. "The Response of Workers to Wages in Tournaments," Journal of Sports Economics, , vol. 1(2), pages 99-123, May.
  • Handle: RePEc:sae:jospec:v:1:y:2000:i:2:p:99-123
    DOI: 10.1177/152700250000100201
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    References listed on IDEAS

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    2. Brad Humphreys & Bernd Frick, 2019. "Prize Structure and Performance: Evidence from NASCAR," Economies, MDPI, vol. 7(4), pages 1-13, October.
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    6. Sabrina Teyssier, 2008. "Les Modes de Rémunération comme MécanismesSélectifs de la Main d'oeuvre : Fondements Théoriques et Estimations Empiriques," Post-Print halshs-00303703, HAL.
    7. Benno Torgler & Justina A.V. Fischer, 2006. "Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital," Working Papers 2006.38, Fondazione Eni Enrico Mattei.
    8. Roman M. Sheremeta, 2011. "Contest Design: An Experimental Investigation," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 573-590, April.
    9. Che, XiaoGang & Humphreys, Brad, 2012. "Earnings and Performance in Women's Professional Alpine Skiing," Working Papers 2012-22, University of Alberta, Department of Economics.
    10. Feddersen, Arne & Humphreys, Brad & Soebbing, Brian, 2012. "Cost Incentives in European Football," Working Papers 2012-13, University of Alberta, Department of Economics.
    11. Markus LANG & Alexander RATHKE & Marco RUNKEL, 2010. "The Economic Consequences Of Foreigner Rules In National Sports Leagues," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 47-64.
    12. Ed Hopkins & Tatiana Kornienko, 2006. "Which Inequality? The Inequality of Resources Versus the Inequality of Rewards," Levine's Bibliography 784828000000000621, UCLA Department of Economics.
    13. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2006. "The Power of Positional Concerns: A Panel Analysis," CREMA Working Paper Series 2006-19, Center for Research in Economics, Management and the Arts (CREMA).
    14. Lallemand, Thierry & Plasman, Robert & Rycx, Francois, 2005. "Women and Competition in Elimination Tournaments: Evidence from Professional Tennis Data," IZA Discussion Papers 1843, Institute of Labor Economics (IZA).
    15. Anurag N. Banerjee & Johan F. M. Swinnen & Alfons Weersink, 2007. "Skating on thin ice: rule changes and team strategies in the NHL," Canadian Journal of Economics, Canadian Economics Association, vol. 40(2), pages 493-514, May.
    16. Abrevaya, Jason, 2002. "Ladder tournaments and underdogs: lessons from professional bowling," Journal of Economic Behavior & Organization, Elsevier, vol. 47(1), pages 87-101, January.
    17. Sheremeta, Roman, 2009. "Essays on Experimental Investigation of Lottery Contests," MPRA Paper 49888, University Library of Munich, Germany.
    18. Benno Torgler & Markus Schaffner & Sascha L. Schmidt & Bruno S. Frey, 2008. "Do Employees Care about their Relative Position? Behavioural Evidence Focusing on Performance," CREMA Working Paper Series 2008-12, Center for Research in Economics, Management and the Arts (CREMA).
    19. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2008. "The Power of Positional Concerns," CREMA Working Paper Series 2008-07, Center for Research in Economics, Management and the Arts (CREMA).
    20. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    21. Banerjee, Anurag N. & Swinnen, Johan & Weersink, Alfons, 2004. "Skating on thin ice: rule changes and team strategies in the NHL," Discussion Paper Series In Economics And Econometrics 0401, Economics Division, School of Social Sciences, University of Southampton.
    22. Keith F. Gilsdorf & Vasant Sukhatme, 2008. "Tournament incentives and match outcomes in women's professional tennis," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2405-2412.
    23. Helmut Dietl & Egon Franck & Martin Grossmann & Markus Lang, 2009. "Contest Theory and its Applications in Sports," Working Papers 0029, University of Zurich, Center for Research in Sports Administration (CRSA).

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