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

Michael Majerczyk, Roman Sheremeta () and Yu Tian

MPRA Paper from University Library of Munich, Germany

Abstract: We examine theoretically and experimentally how combining between-team and within-team incentives affects behavior in team tournaments. Theory predicts that free-riding is likely to 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: C72 D72 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-gth and nep-hrm
Date: 2018-04-18
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Working Paper: Adding Tournament to Tournament: Combining Between-Team and Within-Team Incentives (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:86280

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