Abstract
We conduct a natural field experiment in a retail chain to test 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 rounds of the tournament. As predicted, we find that a more convex prize spread increases second-round performance at the expense of first-round performance, although the magnitude of these effects is small. Moreover, the treatment effect is larger for stores with more stable past performance.
Original language | English |
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Pages (from-to) | 521-569 |
Number of pages | 49 |
Journal | Journal of Labor Economics |
Volume | 33 |
Issue number | 3 |
DOIs | |
Publication status | Published - 2015 |
Research programs
- EUR ESE 34