Performance Responses To Competition Across Skill-Levels In Rank Order Tournaments: Field Evidence and Implications For Tournament Design
Kevin J. Boudreau
London Business School
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 26, 2014
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 2,775 contestants in 755 software algorithm design contests with random assignment. The performance response to added contestants varies non-monotonically across contestants of different abilities, precisely conforming to theory predictions. Most participants respond negatively to competition, while the highest-skilled contestants respond positively. In counterfactual simulations, we interpret a number of tournament design policies (number of competitors, prize allocation and structure, number of divisions, open entry) and assess their effectiveness in shaping optimal tournament outcomes for a designer.
Number of Pages in PDF File: 51
JEL Classification: D02, J4, L2, M5working papers series
Date posted: August 9, 2012 ; Last revised: August 26, 2014
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