Journal of Labor Economics Vol. 33 No. 3 2015
The Effects of Prize Spread and Noise in Elimination Tournaments: A Natural Field Experiment
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.
- DOI
- 10.1086/679670
- Volume
- 33
- Issue
- 3
- Pages
- 521-569
- Language
- en
- Sources
- openalex crossref