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Do Tournaments with Superstars Encourage or Discourage Competition?

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  • Babington, Michael

    () (Florida State University)

  • Goerg, Sebastian J.

    () (Technische Universität München)

  • Kitchens, Carl

    () (Florida State University)

Abstract

To test and replicate the superstar effect reported by Brown (2011) we empirically study contests where a single entrant has an endogenously higher probability of winning. Unlike the previous literature, we test for the presence of the superstar effect in several different contexts. Ultimately, we collect and explore data from four sources: men's and women's professional golf, and men's and women's professional alpine skiing. Our baseline study of men's professional golf serves as a replication of Brown's (2011) study. Empirically, we find little robust evidence of the superstar effect in any of our datasets. In our replication exercise, we approximate the findings of Brown (2011), however, we cannot reject the null that the presence of a superstar has no impact on high ranked competitors. In our other settings, we cannot reject the null that superstars have no influence on the performances of highly ranked competitors.

Suggested Citation

  • Babington, Michael & Goerg, Sebastian J. & Kitchens, Carl, 2017. "Do Tournaments with Superstars Encourage or Discourage Competition?," IZA Discussion Papers 10755, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10755
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    Cited by:

    1. Ryan Elmore & Andrew Urbaczewski, 2021. "Loss Aversion in Professional Golf," Journal of Sports Economics, , vol. 22(2), pages 202-217, February.

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    More about this item

    Keywords

    incentives; tournaments; superstar;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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