Peloton Peers: The Effect of Targets on Performance

36 Pages Posted: 25 Dec 2015 Last revised: 7 Feb 2019

Date Written: February 5, 2019

Abstract

Individuals facing competitive targets increase their effort but respond non-monotonically to the targets difficulty. We use a novel dataset of informal amateur cycling competitions to track the responses of individuals to competitively-set targets (in the form of displacement from the top of a leaderboard). Modeling the choice problem of these individuals, we derive a set of testable hypotheses. We find, as predicted by the model, that individuals compete sooner and more intensely after displacement. As our main result, we find an inverted-U relationship between the increase in effort and the size of the displacement.

Keywords: rank incentives, targets, peer competition, effort choice

JEL Classification: J22, M52

Suggested Citation

Baldauf, Markus and Mollner, Joshua, Peloton Peers: The Effect of Targets on Performance (February 5, 2019). Available at SSRN: https://ssrn.com/abstract=2707801 or http://dx.doi.org/10.2139/ssrn.2707801

Markus Baldauf

University of British Columbia (UBC) - Division of Finance ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Joshua Mollner (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2211 Campus Drive
Evanston, IL 60208
United States

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