Using data from the Senior PGA Tours we analyze the incentive effects of rank order tournaments. Previous studies using data from the PGA Tour reached conflicting conclusions. To resolve the issue, the Senior PGA Tour was chosen for its unique format where players are not cut from the tournament...

Tournament theory provides important insights into organizational reward systems. It examines the incentive properties of reward systems based on rank‐order rather than absolute individual performance. Tournament theory may explain the pattern of managerial pay. It may also explain...