EconPapers    
Economics at your fingertips  
 

Relative Performance Prizes and Dynamic Incentives in Best-of-N Contests

Xiandeng Jiang ()
Additional contact information
Xiandeng Jiang: Southwestern University of Finance and Economics

Review of Industrial Organization, 2018, vol. 53, issue 3, 563-590

Abstract: Abstract This paper introduces a relative performance prize scheme to best-of-N contests. I develop a theoretical model of the best-of-N contest with intermediate prizes that are distributed based on the players’ relative performance. The model predicts that a relative performance prize scheme both increases the players’ level of effort in certain conditions and decreases the performance differential between the winner and the loser in the contest. Empirically, I investigate these theoretical predictions by employing a natural experiment in the group-stage matches of the FIVB (Fédération Internationale de Volleyball) World League and the FIVB World Grand Prix. The results indicate that the introduction of a relative performance prize scheme induces contest participants to intensify their efforts in certain conditions. However, this prize scheme may ultimately result in teams playing fewer sets in matches.

Keywords: Best-of-N contest; Relative performance; Intermediate prizes (search for similar items in EconPapers)
JEL-codes: C72 D72 J33 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11151-018-9646-8 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:revind:v:53:y:2018:i:3:d:10.1007_s11151-018-9646-8

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2

Access Statistics for this article

Review of Industrial Organization is currently edited by L.J. White

More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-05-15
Handle: RePEc:kap:revind:v:53:y:2018:i:3:d:10.1007_s11151-018-9646-8