Adding Tournament to Tournament: Combining Between-Team and Within-Team Incentives

Michael Majerczyk, Roman Sheremeta and Yu Tian
Additional contact information
Michael Majerczyk: J. Mack Robinson College of Business, Georgia State University
Yu Tian: Kenneth G. Dixon School of Accounting, University of Central Florida

Working Papers from Chapman University, Economic Science Institute

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
New Economics Papers: this item is included in nep-exp and nep-hrm
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Citations: View citations in EconPapers (2)

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https://digitalcommons.chapman.edu/esi_working_papers/279/

Related works:
Journal Article: Adding tournament to tournament: Combining between-team and within-team incentives (2019)
Working Paper: Adding Tournament to Tournament: Combining Between-Team and Within-Team Incentives (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:19-20

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