On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments

John List, Daan van Soest, Jan Stoop () and Haiwen Zhou

No 20008, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Both private and public organizations constantly grapple with incentive schemes to induce maximum effort from agents. We begin with a theoretical exploration of optimal contest design, focusing on the number of competitors. Our theory reveals a critical link between the distribution of luck and the number of contestants. We find that if there is considerable (little) mass on good draws, equilibrium effort is an increasing (decreasing) function of the number of contestants. Our first test of the theory implements a laboratory experiment, where important features of the theory can be exogenously imposed. We complement our lab experiment with a field experiment, where we rely on biological models complemented by economic models to inform us of the relevant theoretical predictions. In both cases we find that the theory has a fair amount of explanatory power, allowing a deeper understanding of how to effectively design tournaments. From a methodological perspective, our study showcases the benefits of combining data from both lab and field experiments to deepen our understanding of the economic science.

JEL-codes: C9 C91 C93 D47 H41 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
Note: IO PE
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Citations: View citations in EconPapers (18)

Published as John A. List & Daan van Soest & Jan Stoop & Haiwen Zhou, 2020. "On the Role of Group Size in Tournaments: Theory and Evidence from Laboratory and Field Experiments," Management Science, vol 66(10), pages 4359-4377.

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Working Paper: On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments (2014)
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