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Incentives Versus Sorting in Tournaments: Evidence from a Field Experiment

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  • Leuven, Edwin
  • Oosterbeek, Hessel
  • Sonnemans, Joep
  • van der Klaauw, Bas

Abstract

A vast body of empirical studies lends support to the incentive effects of rank-order tournaments. Evidence comes from experiments in laboratories and non-experimental studies exploiting sports or firm data. Selection of competitors across tournaments may bias these non-experimental studies, whereas short task duration or lack of distracters may limit the external validity of results obtained in lab experiments or from sports data. To address these concerns we conducted a field experiment where students selected themselves into tournaments with different prizes. Within each tournament the best performing student on the final exam of a standard introductory microeconomics course could win a substantial financial reward. A standard non-experimental analysis exploiting across tournament variation in reward size and competitiveness confirms earlier findings. We find however no evidence for effects of tournament participation on study effort and exam results when we exploit our experimental design, indicating that the non-experimental results are completely due to sorting. Treatment only affects attendance of the first workgroup meeting following the announcement of treatment status, suggesting a difference between short-run and long-run decision making.

Suggested Citation

  • Leuven, Edwin & Oosterbeek, Hessel & Sonnemans, Joep & van der Klaauw, Bas, 2008. "Incentives Versus Sorting in Tournaments: Evidence from a Field Experiment," CEPR Discussion Papers 6670, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6670
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    Citations

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    Cited by:

    1. Joshua Angrist & Philip Oreopoulos & Tyler Williams, 2014. "When Opportunity Knocks, Who Answers?: New Evidence on College Achievement Awards," Journal of Human Resources, University of Wisconsin Press, vol. 49(3), pages 572-610.
    2. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    3. repec:eee:ireced:v:27:y:2018:i:c:p:34-44 is not listed on IDEAS
    4. Linnemer, Laurent & Visser, Michael, 2016. "Self-selection in tournaments: The case of chess players," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 213-234.
    5. Thomas Buser, 2016. "The Impact of Losing in a Competition on the Willingness to Seek Further Challenges," Management Science, INFORMS, vol. 62(12), pages 3439-3449, December.
    6. Ketel, Nadine & Linde, Jona & Oosterbeek, Hessel & van der Klaauw, Bas, 2014. "Tuition Fees as a Commitment Device," IZA Discussion Papers 7951, Institute for the Study of Labor (IZA).
    7. Frick, Bernd, 2011. "Gender differences in competitiveness: Empirical evidence from professional distance running," Labour Economics, Elsevier, vol. 18(3), pages 389-398, June.
    8. De Paola, Maria & Gioia, Francesca & Scoppa, Vincenzo, 2018. "The adverse consequences of tournaments: Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 151(C), pages 1-18.
    9. Noemí Herranz-Zarzoso & Gerardo Sabater-Grande, 2016. "Financial incentives and academic performance: An experimental study," Working Papers 2016/18, Economics Department, Universitat Jaume I, Castellón (Spain).
    10. Leuven, Edwin & Oosterbeek, Hessel & van der Klaauw, Bas, 2010. "Splitting Tournaments," IZA Discussion Papers 5186, Institute for the Study of Labor (IZA).
    11. Adam M. Lavecchia & Heidi Liu & Philip Oreopoulos, 2014. "Behavioral Economics of Education: Progress and Possibilities," NBER Working Papers 20609, National Bureau of Economic Research, Inc.
    12. repec:wly:econjl:v:128:y:2018:i:611:p:1634-1682 is not listed on IDEAS
    13. John Morgan & Dana Sisak & Felix Várdy, 2018. "The Ponds Dilemma," Economic Journal, Royal Economic Society, vol. 128(611), pages 1634-1682, June.
    14. Mürüvvet Büyükboyacı, 2016. "A Designer'S Choice Between Single-Prize And Parallel Tournaments," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1774-1789, October.
    15. Jalava, Nina & Joensen, Juanna Schrøter & Pellas, Elin, 2015. "Grades and rank: Impacts of non-financial incentives on test performance," Journal of Economic Behavior & Organization, Elsevier, vol. 115(C), pages 161-196.
    16. J. Atsu Amegashie, 2018. "Quantity-cum-Quality Contests," CESifo Working Paper Series 7110, CESifo Group Munich.
    17. Gjefsen, Hege Marie & Gunnes, Trude, 2016. "The effects of School Accountability on Teacher Mobility and Teacher Sorting," MPRA Paper 69664, University Library of Munich, Germany.
    18. Wang, Zhen & Vukina, Tomislav, 2017. "Sorting into Contests: Evidence from Production Contracts," ARE Working Papers 262930, North Carolina State University, Department of Agricultural and Resource Economics.

    More about this item

    Keywords

    Field Experiments; Incentives; Sorting; Tournaments;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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