Incentives and Selection in Promotion Contests: Is It Possible to Kill Two Birds with One Stone?

Rudi Stracke, Wolfgang Höchtl, Rudolf Kerschbamer and Uwe Sunde

Managerial and Decision Economics, 2015, vol. 36, issue 5, 275-285

Abstract: This paper investigates whether a designer can improve both the incentive provision and the selection performance of a promotion contest by making the competition more (or less) dynamic. A comparison of static (one‐stage) and dynamic (two‐stage) contests reveals that this is not the case. A structural change that improves the performance in one dimension leads to a deterioration in the other dimension. This suggests that modifications of the contest structure are an alternative to strategic handicaps. A key advantage of structural handicaps over participant‐specific ones is that the implementation of the former does not require prior identification of worker types. Copyright © 2014 John Wiley & Sons, Ltd.

Date: 2015
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Working Paper: Incentives and selection in promotion contests: Is it possible to kill two birds with one stone? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:36:y:2015:i:5:p:275-285

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