Working Paper, Department of Economics, Johannes Kepler University of Linz 1613
This article analyzes top-level basketball competitions and measures the effect of superstar presence on effort provision in rank-order tournaments. I extend the previous literature to team competitions for male and female teams, as well as different institutional settings over a long period of time. In addition, I analyze risk-taking behavior in the context of superstar effects. The results of the empirical analysis suggests that the level of superstar dominance is crucial for the observed effects. While there is an significant and sizeable effort reducing superstar effect, less (little) dominance by the superstar seems to be result in a positive peer effects.