Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments?

Thomas Glökler, Kerstin Pull and Manfred Stadler
Additional contact information
Thomas Glökler: Faculty of Economics, Baden-Wuerttemberg Cooperative State University Loerrach, Hang Str. 46–50, 79539 Loerrach, Germany

Games, 2022, vol. 13, issue 5, 1-20

Abstract: We investigate whether tournament prizes that depend on joint output (“variable prize tournaments”) can alleviate the sabotage problem which is otherwise inherent in tournament structures. In a game-theoretical model with three contestants, we compare fixed-prize tournaments with tournaments where prizes depend on contestants’ joint output. Our analysis suggests that the incentives to sabotage in a fixed-prize tournament may be counteracted in a variable-prize tournament such that contestants no longer sabotage, but help one another. We empirically test the implications of our model with the help of a classroom experiment where we compare participants’ choices in a fixed-prize treatment ( F P ) with those of a variable-prize treatment ( V P ) in a between-subjects design. Given our parametrization, we expect efforts to be identical in both treatments, and we expect sabotage in the F P treatment and no sabotage in the V P treatment. In accordance with the model, we find that participants in the fixed-prize tournament sabotage one another, whereas participants in the variable-prize tournament help one another. At the same time, participants’ effort levels do not vary between the two treatments.

Keywords: tournaments; variable prizes; sabotage; help; experiment (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2073-4336/13/5/65/pdf (application/pdf)
https://www.mdpi.com/2073-4336/13/5/65/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jgames:v:13:y:2022:i:5:p:65-:d:930097

Access Statistics for this article

Games is currently edited by Ms. Susie Huang

More articles in Games from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().