Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87167
Authors: 
Delfgaauw, Josse
Dur, Robert
Non, Arjan
Verbeke, Willem
Year of Publication: 
2011
Series/Report no.: 
Tinbergen Institute Discussion Paper 11-120/1
Abstract: 
We conduct a 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: 
Document Type: 
Working Paper

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