In many situations, agents take risks by choosing an action that increases their performance immediately, but that potentially leads to a large loss. The current paper studies how such risk-taking behavior depends on the level of competition that the agents face. We study a tournament model and...

Using a promotion signaling model in which wages are realistically shaped by market forces, we analyze how male overconfidence combined with competitive workplace incentives affects gender equality in the labor market. Our main result is that overconfident workers exert more effort to be...

We study how the presence of promotion competition in the labor market affects household specialization patterns. By embedding a promotion tournament model in a household setting, we show that specialization can emerge as a consequence of competitive work incentives. This specialization outcome,...

This paper examines "market-based tournaments", in which firms use the tournament outcome to update their expectations about worker ability. A theoretical model offers several implications, which are unique to the market-based tournament and which we test in a laboratory experiment. The...