On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments

63 Pages Posted: 31 Mar 2014

See all articles by John A. List

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Daan van Soest

Tilburg University - CentER & Department of Economics

Jan Stoop

Erasmus University Rotterdam (EUR) - Department of Applied Economics

Haiwen Zhou

ODU

Date Written: March 2014

Abstract

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.

Suggested Citation

List, John A. and van Soest, Daan P. and Stoop, Jan and Zhou, Haiwen, On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments (March 2014). NBER Working Paper No. w20008. Available at SSRN: https://ssrn.com/abstract=2418123

John A. List (Contact Author)

University of Chicago - Department of Economics ( email )

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Chicago, IL 60637
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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Daan P. Van Soest

Tilburg University - CentER & Department of Economics ( email )

P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 2072 (Phone)

Jan Stoop

Erasmus University Rotterdam (EUR) - Department of Applied Economics ( email )

Netherlands

Haiwen Zhou

ODU ( email )

VA
United States

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