On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments / John List, Daan Van Soest, Jan Stoop, Haiwen Zhou.

Format:

Book

Author/Creator:

List, John.

Contributor:

National Bureau of Economic Research.

Van Soest, Daan.

Stoop, Jan.

Zhou, Haiwen.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20008.

NBER working paper series no. w20008

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

On the Role of Group Size in Tournaments

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

Both private and public organizations constantly grapple with incentive schemes to induce maximum effort from agents. We begin with a theoretical exploration of optimal contest design, focusing on the number of competitors. Our theory reveals a critical link between the distribution of luck and the number of contestants. We find that if there is considerable (little) mass on good draws, equilibrium effort is an increasing (decreasing) function of the number of contestants. Our first test of the theory implements a laboratory experiment, where important features of the theory can be exogenously imposed. We complement our lab experiment with a field experiment, where we rely on biological models complemented by economic models to inform us of the relevant theoretical predictions. In both cases we find that the theory has a fair amount of explanatory power, allowing a deeper understanding of how to effectively design tournaments. From a methodological perspective, our study showcases the benefits of combining data from both lab and field experiments to deepen our understanding of the economic science.

Notes:

Print version record

March 2014.