Performance Responses to Competition Across Skill-Levels in Rank Order Tournaments: Field Evidence and Implications for Tournament Design
Kevin J. Boudreau
London Business School
Constance E. Helfat
Dartmouth College - Tuck School of Business
Harvard Business School - Technology and Operations Management Group; Harvard University - Berkman Center for Internet & Society; Harvard Institute for Quantitative Social Science
Michael E. Menietti
Harvard-NASA Tournament Laboratory
August 8, 2013
Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 14-014
Tournaments are widely used in the economy to organize production and innovation. We study individual contestant-level data on 2796 contestants in 774 software algorithm design contests with random assignment. Precisely conforming to theory predictions, the performance response to added contestants varies non-monotonically across contestants of different abilities; most respond negatively to competition; highest-skilled contestants respond positively. In counterfactual simulations, we interpret a number of tournament design policies (number of competitors, prize allocation and structure, divisionalization, open entry) as a means of reconciling non-monotonic incentive responses to competition, effectively manipulating the number and skills distribution of contestants facing one another.
Number of Pages in PDF File: 41
JEL Classification: D02, J4, L2, M5working papers series
Date posted: August 9, 2012 ; Last revised: July 2, 2014
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