Contests at the workplace with and without prize selection: Testing theory in a field experiment

Rustamdjan Hakimov

Discussion Papers, Research Unit: Market Behavior from WZB Berlin Social Science Center

Abstract: We conduct a field experiment with 302 workers of the microcredit company in Russia to study the effects of the different designs of a contest for monetary prizes at the workplace. We consider a standard all-pay auction design with two and four prizes of different size and compare it to "parallel" contests with the same prizes, but where participants have to choose the prize prior to the start of the competition and then the winner is selected only among the players who chose the same prize. Despite the theoretical predictions, the parallel contests lead to higher efforts for all players, but mainly by lower-ability players. Division of prizes leads to the predicted effects. In parallel contests, too many players choose the higher prize than equilibrium suggests. Overall, the parallel version of contests appeared to be more profitable for the firm.

Keywords: contests; incomplete information; all-pay auctions; field experiment (search for similar items in EconPapers)
JEL-codes: C78 I21 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cis and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbmbh:spii2016211

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