Workaholics and Drop Outs in Optimal Organizations

CentER Discussion Paper No. 2003-43

Posted: 8 Jun 2004

See all articles by Wieland Müller

Wieland Müller

University of Vienna, Department of Economics & VCEE; Tilburg University, Department of Economics & CentER

Andrew Schotter

New York University (NYU) - Department of Economics

Date Written: 2003

Abstract

This paper reports the results of experiments designed to test the theory of the optimal composition of prizes in contests. We find that while in the aggregate results mask an unexpected compositional effect on the individual level. While theory predicts that subject efforts are continuous and increasing functions of ability, the actual efforts of our laboratory subjects bifurcate. Low ability workers drop out and exert little or nor effort while high ability subjects try too hard. This discontinuity, which is masked by aggregation, has significant consequences for behavior in organizations.

Keywords: Contests, all-pay auctions, experiments

JEL Classification: C92, D44, J31, D72, D82

Suggested Citation

Müller, Wieland and Schotter, Andrew, Workaholics and Drop Outs in Optimal Organizations (2003). CentER Discussion Paper No. 2003-43. Available at SSRN: https://ssrn.com/abstract=555788

Wieland Müller (Contact Author)

University of Vienna, Department of Economics & VCEE ( email )

Oskar-Morgenstern-Platz 1
Vienna, A-1090
Austria

HOME PAGE: http://https://homepage.univie.ac.at/wieland.mueller/

Tilburg University, Department of Economics & CentER ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/w.mueller-3.htm

Andrew Schotter

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States
212-998-8909 (Phone)
212-995-4186 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
592
PlumX Metrics