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Title:Incentives in Tournaments with Endogenous Prize Selection PDF Logo
Authors:Harbring, Christine
Irlenbusch, Bernd
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1340
Abstract:Tournament incentive schemes offer payments dependent on relative performance and thereby are intended to motivate agents to exert productive effort. Unfortunately, however, an agent may also be tempted to destroy the production of his competitors in order to improve the own relative position. In the present study we investigate whether this sabotage problem is mitigated in a repeated interaction between the agents and the principal. As sabotage can hardly be observed in real-world organizations we employ a controlled experiment. Our data provide clear evidence that agents? behavior is not only guided by competition between agents but also by the possibility to punish the principal via sabotage.
Subjects:relative performance evaluation
personnel economics
sabotage
reciprocity
experiments
JEL:J41
J33
D23
C72
L23
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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