Balafoutas, Loukas; Dutcher, Glenn; Lindner, Florian; … - 2012
punishment tournament, which, respectively, reward the best performer and punish the worst performer. We show that while the two …. Specifically, punishment tournaments lead to higher profits of the firm. The reason is that low-ability agents are discouraged less … in punishment tournaments than in reward tournaments, and hence can be compensated less to meet their participation …