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Fatigue in dynamic tournaments

  • Dmitry Ryvkin

    ()

    (Department of Economics, Florida State University)

Employee overwork and fatigue are a concern of managers in many organizations, as they may increase health and safety risks and decrease productivity. The problem is especially severe in competitive environments where compensation and promotions are awarded, explicitly or implicitly, on the basis of relative performance. In this paper, we propose a theory for, and study experimentally, the phenomenon of fatigue in dynamic contests aimed to mimic such settings. Theoretically, we find that if managers wish to avoid overwork, for example due to its negative impact on productivity, they should let their employees compete for promotion longer, with multiple intermediate performance evaluation stages. Experimentally, we find that subjects react strongly to changes in the environment related to fatigue and follow the comparative statics of equilibrium predictions. At the same time, within a given environment subjects behave as if they are unaware of the deteriorating effect of fatigue on their competitiveness. The results suggest that nonspecific information on consequences of fatigue is more effective than targeted information on how fatigue affects an employee’s chances of winning the competition.

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File URL: ftp://econpapers.fsu.edu/RePEc/fsu/wpaper/wp2009_06_03.pdf
File Function: First version, 2009-06
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Paper provided by Department of Economics, Florida State University in its series Working Papers with number wp2009_06_03.

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Length: 34
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:fsu:wpaper:wp2009_06_03
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  1. Konrad, Kai A. & Kovenock, Dan, 2006. "Multi-battle contests," Purdue University Economics Working Papers 1187, Purdue University, Department of Economics.
  2. Pamela Schmitt & Robert Shupp & Kurtis Swope & John Cadigan, 2004. "Multi-period rent-seeking contests with carryover: Theory and experimental evidence," Economics of Governance, Springer, vol. 5(3), pages 187-211, November.
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  14. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  15. Alexander Matros, 2006. "Elimination Tournaments where Players Have Fixed Resources," Working Papers 205, University of Pittsburgh, Department of Economics, revised Jan 2006.
  16. Harris, Christopher & Vickers, John, 1985. "Perfect Equilibrium in a Model of a Race," Review of Economic Studies, Wiley Blackwell, vol. 52(2), pages 193-209, April.
  17. Alannah Orrison & Andrew Schotter & Keith Weigelt, 2004. "Multiperson Tournaments: An Experimental Examination," Management Science, INFORMS, vol. 50(2), pages 268-279, February.
  18. Beck A. Taylor & Justin G. Trogdon, 2002. "Losing to Win: Tournament Incentives in the National Basketball Association," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 23-41, January.
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