Workaholics and Drop Outs in Optimal Organizations

Wieland Müller and Andrew Schotter

No 22, Working Papers from New York University, Center for Experimental Social Science

Abstract: This paper reports the results of experiments designed to test the theory of the optimal composition of prizes in contests. We find that while in the aggregate the behavior of our subjects is consistent with that predicted by the theory, such aggregate results mask an unexpected compositional effect on the individual level. While theory predicts that subject efforts are continuous and increasing functions of ability, the actual efforts of our laboratory subjects bifurcate. Low ability workers drop out and exert little or no effort while high ability subjects try too hard. This discontinuity, which is masked by aggregation, has significant consequences for behavior in organizations.

Keywords: Contests; All-Pay Auctions; Experiments (search for similar items in EconPapers)
JEL-codes: C92 D44 D72 D82 J31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2007-01-05
New Economics Papers: this item is included in nep-bec, nep-exp and nep-lab
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Related works:
Working Paper: Workaholics and Drop Outs in Optimal Organizations (2003)
Working Paper: Workaholics and Drop Outs in Optimal Organizations (2003)
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