Abstract
Promotions play an important role for the provision of incentives in firms. We analyze incentives in multistage elimination tourna- ments with controlled laboratory experiments. In our two main treatments, we compare a two-stage tournament to a one-stage tournament. Subjects in the two-stage treatment provide excess effort in the first stage, both with respect to Nash predictions and compared to the strategically equivalent one-stage tournament. Additional control treatments confirm that excess effort in early stages is a robust finding and suggest that above-equilibrium effort might be driven by limited degrees of forward-looking behavior and subjects deriving nonmonetary value from competing.
Original language | English |
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Pages (from-to) | 149-174 |
Number of pages | 26 |
Journal | Journal of Labor Economics |
Volume | 30 |
Issue number | 1 |
DOIs | |
Publication status | Published - Jan 2012 |