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Strive to be First or Avoid Being Last: An Experiment on Relative Performance Incentives

E. Dutcher, Loukas Balafoutas (), Florian Lindner (), Dmitry Ryvkin () and Matthias Sutter ()

No 9330, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We utilize a laboratory experiment to compare effort provision under optimal tournament contracts with different distributions of prizes which motivate agents to compete to be first, avoid being last, or both. We find that the combined tournament contract incorporating both incentives at the top and at the bottom induces the highest effort, especially in larger groups. Avoiding being last produces the lowest variance of effort and is more effective at motivating employees compared to competing for the top.

Keywords: experiment; contract; loser; winner; tournament; learning (search for similar items in EconPapers)
JEL-codes: C90 D24 J24 J33 M52 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2015-09
New Economics Papers: this item is included in nep-cbe, nep-cta, nep-exp, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26) Track citations by RSS feed

Published - published in: Games and Economic Behavior, 2015, 94, 39-56.

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Related works:
Journal Article: Strive to be first or avoid being last: An experiment on relative performance incentives (2015) Downloads
Working Paper: Strive to be first or avoid being last: An experiment on relative performance incentives (2013) Downloads
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