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The Response of Workers to Wages in Tournaments

Author

Listed:
  • 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
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    Cited by:

    1. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt, 2008. "Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field," CREMA Working Paper Series 2008-11, Center for Research in Economics, Management and the Arts (CREMA).
    2. Markus Schaffner & Benno Torgler, 2008. "Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons," School of Economics and Finance Discussion Papers and Working Papers Series 234, School of Economics and Finance, Queensland University of Technology, revised 17 Jun 2008.
    3. repec:bla:germec:v:18:y:2017:i:1:p:81-98 is not listed on IDEAS
    4. Torgler, Benno & Schmidt, Sascha L & Frey, Bruno S., 2006. "The Power of Positional Concerns: A Panel Analysis," Berkeley Olin Program in Law & Economics, Working Paper Series qt1z14v7zt, Berkeley Olin Program in Law & Economics.
    5. 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).
    6. Frick, Bernd & Humphreys, Brad, 2011. "Prize Structure and Performance: Evidence from NASCAR," Working Papers 2011-12, University of Alberta, Department of Economics.
    7. Thierry Lallemand & Robert Plasman & François Rycx, 2005. "Women and competition in elimination tournaments: evidence from professional tennis data," DULBEA Working Papers 05-19.RS, ULB -- Universite Libre de Bruxelles.
    8. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2006. "Relative Income Position and Performance: An Empirical Panel Analysis," CREMA Working Paper Series 2006-03, Center for Research in Economics, Management and the Arts (CREMA).
    9. Roman M. Sheremeta, 2011. "Contest Design: An Experimental Investigation," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 573-590, April.
    10. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
    11. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt & Uwe Dulleck, 2008. "Inequality Aversion and Performance in and on the Field," NCER Working Paper Series 36, National Centre for Econometric Research.
    12. Sabrina Teyssier, 2008. "Les Modes de Rémunération comme MécanismesSélectifs de la Main d'oeuvre : Fondements Théoriques et Estimations Empiriques," Post-Print halshs-00303703, HAL.
    13. Justina A.V. Fischer & Benno Torgler, 2006. "Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital," University of St. Gallen Department of Economics working paper series 2006 2006-04, Department of Economics, University of St. Gallen.
    14. 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).
    15. Che, XiaoGang & Humphreys, Brad, 2012. "Earnings and Performance in Women's Professional Alpine Skiing," Working Papers 2012-22, University of Alberta, Department of Economics.
    16. Feddersen, Arne & Humphreys, Brad & Soebbing, Brian, 2012. "Cost Incentives in European Football," Working Papers 2012-13, University of Alberta, Department of Economics.
    17. 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.
    18. Ed Hopkins & Tatiana Kornienko, 2006. "Which Inequality? The Inequality of Resources Versus the Inequality of Rewards," Levine's Bibliography 784828000000000621, UCLA Department of Economics.
    19. 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.
    20. Abrevaya, Jason, 2002. "Ladder tournaments and underdogs: lessons from professional bowling," Journal of Economic Behavior & Organization, Elsevier, vol. 47(1), pages 87-101, January.
    21. Sheremeta, Roman, 2009. "Essays on Experimental Investigation of Lottery Contests," MPRA Paper 49888, University Library of Munich, Germany.
    22. 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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