Promotions and Incentives: The Case of Multistage Elimination Tournaments

TY - JOUR

T1 - Promotions and Incentives

T2 - The Case of Multistage Elimination Tournaments

AU - Altmann, Steffen

AU - Falk, Armin

AU - Wibral, Matthias

PY - 2012/1/1

Y1 - 2012/1/1

N2 - Promotions play an important role for the provision of incentives in firms. We analyze incentives in multistage elimination tournaments with controlled laboratory experiments. In our two main treatments, we compare a two-stage tournament to a one-stage tournament. Subjects in the two-stage treatment provide excess effort in the first stage, both with respect to Nash predictions and compared to the strategically equivalent one-stage tournament. Additional control treatments confirm that excess effort in early stages is a robust finding and suggest that above-equilibrium effort might be driven by limited degrees of forward-looking behavior and subjects deriving nonmonetary value from competing.

AB - Promotions play an important role for the provision of incentives in firms. We analyze incentives in multistage elimination tournaments with controlled laboratory experiments. In our two main treatments, we compare a two-stage tournament to a one-stage tournament. Subjects in the two-stage treatment provide excess effort in the first stage, both with respect to Nash predictions and compared to the strategically equivalent one-stage tournament. Additional control treatments confirm that excess effort in early stages is a robust finding and suggest that above-equilibrium effort might be driven by limited degrees of forward-looking behavior and subjects deriving nonmonetary value from competing.

U2 - 10.1086/662130

DO - 10.1086/662130

M3 - Journal article

AN - SCOPUS:84856006160

SN - 0734-306X

VL - 30

SP - 149

EP - 174

JO - Journal of Labor Economics

JF - Journal of Labor Economics

IS - 1

ER -