Performance responses to competition across skill-levels in rank order tournaments: Field evidence and implications for tournament design
Journal
RAND Journal of Economics
Subject
Strategy and Entrepreneurship
Publishing details
Publication Year
2016
Abstract
Tournaments are widely used in the economy to organize production and innovation. We study individual contestant-level data on 2796 contestants in 774 software algorithm design contests with random assignment. Precisely conforming to theory predictions,the performance response to added contestants varies non-monotonically across contestantsof different abilities; most respond negatively to competition; highest-skilledcontestants respond positively. In counterfactual simulations, we interpret a numberof tournament design policies (number of competitors, prize allocation and structure, divisionalization, open entry) as a means of reconciling non-monotonic incentive responses to competition, effectively manipulating the number and skills distribution of contestants facing one another.
Available on ECCH
No
