Economic Inquiry 2009 Self-Selection and the Efficiency of Tournaments
نویسندگان
چکیده
The literature has shown that the overall efficiency of exogenously imposed tournaments is reduced by a high variance in performance. This paper reports results from an experiment analyzing whether allowing subjects to self-select into different payment schemes is reducing the variability of performance in tournaments. We show that when the subjects choose to enter a tournament instead of a piece-rate payment scheme, the average effort is higher and the between-subject variance is substantially lower than when the same payment scheme is imposed. Mainly based on risk aversion, sorting is efficiency-enhancing since it increases the homogeneity of the contestants. Tor Eriksson (Aarhus School of Business, Aarhus University, Denmark) Sabrina Teyssier (GATE, University of Lyon, France) Marie-Claire Villeval (CNRS, GATE, France, and IZA, Bonn, Germany) ha ls hs -0 04 51 60 0, v er si on 1 22 D ec 2 01 1
منابع مشابه
Self-Selection and the Efficiency of Tournaments
Self-Selection and the Efficiency of Tournaments When exogenously imposed, rank-order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance (Bull, Schotter, and Weigelt 1987). However, since the efficiency of performance-related pay is attributable both to its incentive effect and to its selection effect among employees (Lazear, 2000), i...
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