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Adding tournament to tournament: Combining between-team and within-team incentives

Michael Majerczyk, Roman Sheremeta () and Yu Tian

Journal of Economic Behavior & Organization, 2019, vol. 166, issue C, 1-11

Abstract: We examine theoretically and experimentally how combining between-team and within-team incentives affects behavior in team tournaments. Theory predicts that free-riding will occur when there are only between-team incentives, and offering within-team incentives may solve this problem. However, if individuals collude, then within-team incentives may not be as effective at reducing free-riding. Consistent with the theoretical predictions, the results of our experiment indicate that although between-team incentives are effective at increasing individual effort, there is substantial free-riding and declining effort over time. Importantly, a combination of between-team and within-team incentives is effective not only at generating effort but also at sustaining effort over time, mitigating free-riding problem, increasing cooperation and decreasing collusion within teams.

Keywords: Individual incentive; Team incentive; Tournament; Free-riding; Collusion (search for similar items in EconPapers)
JEL-codes: C70 D72 H41 (search for similar items in EconPapers)
Date: 2019
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Working Paper: Adding Tournament to Tournament: Combining Between-Team and Within-Team Incentives (2019) Downloads
Working Paper: Adding Tournament to Tournament: Combining Between-Team and Within-Team Incentives (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:166:y:2019:i:c:p:1-11

DOI: 10.1016/j.jebo.2019.09.002

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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