The Effects of Tournament Horizon and the Percentage of Winners on Social Comparisons and Performance in Multi-Period Competitions

We examine the effects of two important tournament design features, tournament horizon and percentage of winners on social comparisons and performance in a multi-period setting. Prior research has individually examined these two features, but we are the first to study their joint effects. We predict that because relative performance feedback is more meaningful in grand tournaments regarding the likelihood of future period outcomes (winning or losing) compared to repeated tournaments, individuals will engage more in social comparisons. In turn, by engaging more in social comparisons, we also predict performance will be higher in grand versus repeated tournaments. We also examine the extent to which the percentage of winners affects the strength of the predicted relations among tournament horizon, social comparisons and performance. Finally, we predict that repeated tournaments will be more effective at sustaining effort when the percentage of winners is high, but grand tournaments will be more effective when the percentage of winners is low. Results from a lab experiment with 400 undergraduate students support all of our predictions. Moreover, we find no evidence that the percentage of winners influences the impact of tournament horizon on social comparisons and overall performance. We identify implications for theory and practice