The Incentive Effects of Appointment Tournaments in German Higher Education
Schmalenbach Business Review, Vol. 62, pp. 378-400, October 2010
23 Pages Posted: 25 Nov 2010
Date Written: October 15, 2010
In 2001, the German system of higher education underwent reforms that were, among others, intended to raise the incentives for university professors. However, even before the reform, publication records of university German professors showed high output levels over a long period of academic careers. We present one possibility of rationalizing the observed behavior by modeling the incentive effects of appointment tournaments in German higher education. We extend Lazear and Rosen (1981) by allowing for intrinsic motivation applying J-curved effort cost functions and accounting for contestant heterogeneity distinguishing junior academics and professors. We analyze the effects of selected reform elements on the incentives arising from the appointment system.
Keywords: Appointment System, Asymmetric Tournaments, Handicap, Incentives, Intrinsic Motivation, Reform of German Higher Education
JEL Classification: A11, J31, J41, M5, M51
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