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Contests for Ranks: Experimental Evidence

Author

Listed:
  • Haimanti Bhattacharya

    () (Department of Economics, University of Utah, 1645 E. Campus Center Drive, Room 308, Salt Lake City, UT, 84112, USA;)

  • Subhasish Dugar

    () (Department of Economics, University of Calgary, 2500 University Drive, N.W., SS 454, Calgary, T2N 1N4, Canada; corresponding author)

Abstract

We use experiments to analyze multiple dimensions of the relationship between rank incentives and individual performance. In our experiment (i) rank is defined as subjects' relative position in their group based on their performance in a real effort task and (ii) subjects' earnings are independent of their performance. We find that any rank incentive improves mean performance than no rank incentive, and this result is independent of the group size. In the large group, the mean performance increases strictly in all except at the highest rank incentive, but in the small group the mean performance increases weakly in rank incentives. Finally, the mean performance is significantly higher in the large than in the small group because of a higher “prestige effect.” In additional treatments in which we do not reveal the identity of the status-prize winners, we find that average performance is identical to that in the baseline treatment without any status prizes. The last result signifies the important role that public revelation plays to enhance the strength of status. The results are important for managerial practices.

Suggested Citation

  • Haimanti Bhattacharya & Subhasish Dugar, 2013. "Contests for Ranks: Experimental Evidence," Southern Economic Journal, Southern Economic Association, vol. 79(3), pages 621-638, January.
  • Handle: RePEc:sej:ancoec:v:79:3:y:2013:p:621-638
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    File URL: http://dx.doi.org/10.4284/0038-4038-2011.020
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    Cited by:

    1. Leonie Gerhards & Neele Siemer, 2016. "The Impact Of Private And Public Feedback On Worker Performance—Evidence From The Lab," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1188-1201, April.

    More about this item

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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