Pay and Performance in Professional Road Racing: The Case of City Marathons

Bernd Frick () and Joachim Prinz
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Bernd Frick: Witten/Herdecke University
Joachim Prinz: Witten/Herdecke University

International Journal of Sport Finance, 2007, vol. 2, issue 1, 25-35

Abstract: In a world of asymmetric information and non-trivial monitoring costs, the design and implementation of a compensation and reward system that maximizes the individual athlete’s performance is one of the critical variables affecting the reputation of a specific sports event. Assuming that the relationship between a race organizer and a professional runner can be characterized as a principal agent-relationship, we use detailed data from 57 city marathons to test various hypotheses derived from tournament theory. Controlling for a large number of other possible determinants of race quality, we find that the level of the prize money as well as its distribution influence the participants’ performance in the predicted way. When examined in more detail, however, the incentive effects diminish.

Keywords: tournaments; incentives; effort; pay-performance-relationship (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2007
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International Journal of Sport Finance is currently edited by Arne Feddersen, Babatunde Buraimo, Joachim Prinz and Jane Ruseski

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