Behavioral and Welfare Effects of Tournaments and Fixed Performance Standard Contracts with Heterogeneous Agents: Some Experimental Evidence

Steven Wu (), Natalie Nazaryan, Brian Roe and Thomas Sporleder ()

No 20103, 2004 Annual meeting, August 1-4, Denver, CO from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Experimental economics is used to compare tournaments (T) and fixed performance contracts (F) when agents have heterogeneous costs. Our primary findings were: (1) There is no statistical difference in average pooled effort (effort by high ability and low ability subjects are pooled together to get an aggregate average) under T and F contracts, (2) on average, effort exerted by high ability agents is considerably higher than effort exerted by low ability agents under both types of contracts, (3) average pooled payoff for the subjects is affected by the type of contract used. Statistical analysis of the results revealed that high ability subjects generally benefit from tournaments whereas low ability agents are harmed by tournaments. Only in the case where common shocks are dominant would low ability agents not be negatively impacted by tournaments.

Keywords: Research; Methods/; Statistical; Methods (search for similar items in EconPapers)
Pages: 36
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/20103/files/sp04wu01.pdf (application/pdf)

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:ags:aaea04:20103

DOI: 10.22004/ag.econ.20103

Access Statistics for this paper

More papers in 2004 Annual meeting, August 1-4, Denver, CO from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().