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Incentive Effects in Asymmetric Tournaments Empirical Evidence from the German Hockey League

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  • Nieken, Petra
  • Stegh, Michael

Abstract

Following tournament theory, incentives will be rather low if the contestants of a tournament are heterogeneous. We empirically test this prediction using a large dataset from the German Hockey League. Our results show that indeed the intensity of a game is lower if the teams are more heterogeneous. This effect can be observed for the game as a whole as well as for the ?rst and last third. When dividing the teams in the dataset into favorites and underdogs, we only observe a reduction of effort provision from favorite teams. As the number of games per team changes between different seasons, we can also investigate the effect of a changing spread between winner and loser prize. In line with theory, teams reduce effort if the spread declines. Interestingly, effort is also sensitive to the total number of teams in the league even if the price spread remains unchanged.

Suggested Citation

  • Nieken, Petra & Stegh, Michael, 2010. "Incentive Effects in Asymmetric Tournaments Empirical Evidence from the German Hockey League," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 305, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    • Handle: RePEc:trf:wpaper:305
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    Cited by:

    1. Jeanine Miklós-Thal & Hannes Ullrich, 2016. "Career Prospects and Effort Incentives: Evidence from Professional Soccer," Management Science, INFORMS, vol. 62(6), pages 1645-1667, June.
    2. Gerd Muehlheusser & Sandra Schneemann & Dirk Sliwka, 2016. "The Impact Of Managerial Change On Performance: The Role Of Team Heterogeneity," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1128-1149, April.
    3. Graff, Frederik & Grund, Christian & Harbring, Christine, 2021. "Competing on the Holodeck - The effect of virtual peers and heterogeneity in dynamic tournaments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    4. Johannes Berger & Petra Nieken, 2016. "Heterogeneous Contestants and the Intensity of Tournaments," Journal of Sports Economics, , vol. 17(7), pages 631-660, October.
    5. Hammond, Robert G. & Zheng, Xiaoyong, 2013. "Heterogeneity in tournaments with incomplete information: An experimental analysis," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 248-260.
    6. Mario Lackner, 2016. "Teams as Superstars: Effort and Risk Taking in Rank-Order Tournaments for Women and Men," Economics working papers 2016-13, Department of Economics, Johannes Kepler University Linz, Austria.

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    More about this item

    Keywords

    Tournaments; Heterogeneity; Incentives; Effort;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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