SELF-SELECTION AND THE EFFICIENCY OF TOURNAMENTS
"The literature has shown that the overall efficiency of exogenously imposed tournaments is reduced by a high variance in performance. This article reports results from an experiment analyzing whether allowing subjects to self-select into different payment schemes is reducing the variability of performance in tournaments. We show that when the subjects choose to enter a tournament instead of a piece-rate payment scheme, the average effort is higher and the between-subject variance is substantially lower than when the same payment scheme is imposed. Mainly based on risk aversion, sorting is efficiency enhancing since it increases the homogeneity of the contestants". ("JEL "M52, J33, J31, C81, C91) Copyright (c) 2007 Western Economic Association International.
Year of publication: |
2009
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Authors: | ERIKSSON, TOR ; TEYSSIER, SABRINA ; VILLEVAL, MARIE-CLAIRE |
Published in: |
Economic Inquiry. - Western Economic Association International - WEAI, ISSN 0095-2583. - Vol. 47.2009, 3, p. 530-548
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Publisher: |
Western Economic Association International - WEAI |
Saved in:
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