Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/209655
Authors: 
March, Christoph
Sahm, Marco
Year of Publication: 
2019
Series/Report no.: 
BERG Working Paper Series 155
Abstract: 
We investigate overlapping contests in multi-divisional organizations in which an individual's effort simultaneously determines the outcome of several contests on different hierarchical levels. We show that individuals in smaller units are advantaged in the grand (organization-wide) contest for two reasons: First, the incentive to free-ride is smaller in inter-divisional contests. Second, competition in the intradivisional contest is less fierce. Both effects induce a higher marginal utility of effort provision. We test the model in a laboratory experiment and confirm its main predictions. Our results have important consequences for the provision of incentives in organizations and the design of sports competitions.
Subjects: 
Contest
Rent-seeking
Hierarchy
Teams
Experiment
JEL: 
C72
C92
D72
ISBN: 
978-3-943153-76-7
Document Type: 
Working Paper

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