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Title:The effects of prize spread and noise in elimination tournaments: A natural field experiment PDF Logo
Authors:Delfgaauw, Josse
Dur, Robert
Non, Arjan
Verbeke, Willem
Issue Date:2012
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6480
Abstract:We conduct a natural field experiment in a large retail chain to test basic predictions of tournament theory regarding prize spread and noise. A random subset of the 208 stores participates in two-stage elimination tournaments. Tournaments differ in the distribution of prize money across winners of the first and second round of the tournament. As predicted by theory, we find that a more convex prize spread increases performance in the second round at the expense of first-round performance, although the magnitude of these effects is small. Moreover, the treatment effect is significantly larger for stores that historically have relatively stable performance as compared to stores with more noisy performance.
Subjects:elimination tournaments
incentives
prize spread
performance measurement
field experiment
JEL:C93
M51
M52
Persistent Identifier of the first edition:urn:nbn:de:101:1-2012080812189
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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