IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v54y2022i30p3505-3520.html
   My bibliography  Save this article

Incentive pay and decision quality: evidence from NCAA football coaches

Author

Listed:
  • Marcella Cartledge
  • Luke Taylor

Abstract

Using play-by-play American football data and panel data on head coach remuneration, we test whether a head coach’s incentive pay affects the quality of their decisions. We proceed by first estimating an ‘optimal strategy’ for first-down offensive plays, then investigate whether the gap between actual and optimal choices is affected by incentive pay. In contrast to merely looking at the outcome of an agent’s choice, our approach considers the decision environment and the resources available. We find a small, but significant, negative effect of incentive pay on decision quality. Critically, this effect is not found when looking at raw outcome measures.

Suggested Citation

  • Marcella Cartledge & Luke Taylor, 2022. "Incentive pay and decision quality: evidence from NCAA football coaches," Applied Economics, Taylor & Francis Journals, vol. 54(30), pages 3505-3520, June.
    • Handle: RePEc:taf:applec:v:54:y:2022:i:30:p:3505-3520
    DOI: 10.1080/00036846.2021.2010643
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2021.2010643
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2021.2010643?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Simmons, Rob & Berri, David J., 2011. "Mixing the princes and the paupers: Pay and performance in the National Basketball Association," Labour Economics, Elsevier, vol. 18(3), pages 381-388, June.
    2. Mammen, Enno & Støve, Bård & Tjøstheim, Dag, 2009. "Nonparametric Additive Models For Panels Of Time Series," Econometric Theory, Cambridge University Press, vol. 25(2), pages 442-481, April.
    3. Victor Lavy, 2009. "Performance Pay and Teachers' Effort, Productivity, and Grading Ethics," American Economic Review, American Economic Association, vol. 99(5), pages 1979-2011, December.
    4. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    5. Cameron, A. Colin & Gelbach, Jonah B. & Miller, Douglas L., 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(2), pages 238-249.
    6. David A. Savage & Benno Torgler, 2012. "Nerves of steel? Stress, work performance and elite athletes," Applied Economics, Taylor & Francis Journals, vol. 44(19), pages 2423-2435, July.
    7. Carlos Pestana Barros & Nicolas Peypoch & Scott Tainsky, 2014. "Cost efficiency of French soccer league teams," Applied Economics, Taylor & Francis Journals, vol. 46(8), pages 781-789, March.
    8. Kevin J. Stiroh, 2007. "Playing For Keeps: Pay And Performance In The Nba," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 145-161, January.
    9. Bryson, Alex & Buraimo, Babatunde & Simmons, Rob, 2011. "Do salaries improve worker performance?," Labour Economics, Elsevier, vol. 18(4), pages 424-433, August.
    10. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    11. Bruno S. Frey & Reto Jegen, 2001. "Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
    12. Jahn K. Hakes & Raymond D. Sauer, 2006. "An Economic Evaluation of the Moneyball Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 173-186, Summer.
    13. Roland G. Fryer, 2013. "Teacher Incentives and Student Achievement: Evidence from New York City Public Schools," Journal of Labor Economics, University of Chicago Press, vol. 31(2), pages 373-407.
    14. Dan Ariely & Uri Gneezy & George Loewenstein & Nina Mazar, 2009. "Large Stakes and Big Mistakes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(2), pages 451-469.
    15. Kathleen J. Mullen & Richard G. Frank & Meredith B. Rosenthal, 2010. "Can you get what you pay for? Pay‐for‐performance and the quality of healthcare providers," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 64-91, March.
    16. Liam J. A. Lenten, 2017. "Racial discrimination in umpire voting: an (arguably) unexpected result," Applied Economics, Taylor & Francis Journals, vol. 49(37), pages 3751-3757, August.
    17. MacKinnon, James G. & White, Halbert, 1985. "Some heteroskedasticity-consistent covariance matrix estimators with improved finite sample properties," Journal of Econometrics, Elsevier, vol. 29(3), pages 305-325, September.
    18. Virgil Carter & Robert E. Machol, 1971. "Technical Note—Operations Research on Football," Operations Research, INFORMS, vol. 19(2), pages 541-544, April.
    19. Christoph Buehren & Marvin Gabriel, 2021. "Performing best when it matters the most: Evidence from professional handball," MAGKS Papers on Economics 202119, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    20. Jens Perch Nielsen & Stefan Sperlich, 2005. "Smooth backfitting in practice," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 67(1), pages 43-61, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shandana Shoaib & Yehuda Baruch, 2019. "Deviant Behavior in a Moderated-Mediation Framework of Incentives, Organizational Justice Perception, and Reward Expectancy," Journal of Business Ethics, Springer, vol. 157(3), pages 617-633, July.
    2. Michael T. Rauh & Giulio Seccia, 2010. "Agency and Anxiety," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(1), pages 87-116, March.
      • Michael T. Rauh & Giulio Seccia, 2006. "Agency and Anxiety," Working Papers 2006-02, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    3. Pokorny, Kathrin, 2008. "Pay--but do not pay too much: An experimental study on the impact of incentives," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 251-264, May.
    4. Andrei Bremzen & Elena Khokhlova & Anton Suvorov & Jeroen van de Ven, 2015. "Bad News: An Experimental Study on the Informational Effects Of Rewards," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 55-70, March.
    5. Florian Ederer & Gustavo Manso, 2013. "Is Pay for Performance Detrimental to Innovation?," Management Science, INFORMS, vol. 59(7), pages 1496-1513, July.
    6. Allen, Thomas & Whittaker, William & Sutton, Matt, 2017. "Does the proportion of pay linked to performance affect the job satisfaction of general practitioners?," Social Science & Medicine, Elsevier, vol. 173(C), pages 9-17.
    7. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.
    8. Takahashi, Hiromasa & Shen, Junyi & Ogawa, Kazuhito, 2016. "An experimental examination of compensation schemes and level of effort in differentiated tasks," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 61(C), pages 12-19.
    9. Bradler, Christiane & Neckermann, Susanne & Warnke, Arne Jonas, 2016. "Incentivizing creativity: A large-scale experiment with tournaments and gifts," ZEW Discussion Papers 16-040, ZEW - Leibniz Centre for European Economic Research.
    10. Andrew E. Clark & David Masclet & Marie Claire Villeval, 2010. "Effort and Comparison Income: Experimental and Survey Evidence," ILR Review, Cornell University, ILR School, vol. 63(3), pages 407-426, April.
    11. Gianluca Fiorentini & Elisa Iezzi & Matteo Lippi Bruni & Cristina Ugolini, 2011. "Incentives in primary care and their impact on potentially avoidable hospital admissions," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(4), pages 297-309, August.
    12. Joshua M. Congdon-Hohman & Jonathan A. Lanning, 2018. "Beyond Moneyball," Journal of Sports Economics, , vol. 19(7), pages 1046-1061, October.
    13. Dohmen, Thomas J., 2008. "Do professionals choke under pressure?," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 636-653, March.
    14. Brosig-Koch, Jeannette & Hennig-Schmidt, Heike & Kairies-Schwarz, Nadja & Kokot, Johanna & Wiesen, Daniel, 2020. "Physician performance pay: Experimental evidence," HERO Online Working Paper Series 2020:3, University of Oslo, Health Economics Research Programme.
    15. Philippe Jacquart & J. Scott Armstrong, 2013. "The Ombudsman: Are Top Executives Paid Enough? An Evidence-Based Review," Interfaces, INFORMS, vol. 43(6), pages 580-589, December.
    16. Kuvaas, Bård & Buch, Robert & Weibel, Antoinette & Dysvik, Anders & Nerstad, Christina G.L., 2017. "Do intrinsic and extrinsic motivation relate differently to employee outcomes?," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 244-258.
    17. Baethge, Caroline & Fiedler, Marina, 2016. "Aligning mission preferences: Does self-selection foster performance in working groups?," Passauer Diskussionspapiere, Betriebswirtschaftliche Reihe B-18-16, University of Passau, Faculty of Business and Economics.
    18. McCausland, David & Pouliakas, Konstantinos & Theodossiou, Ioannis, 2005. "Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction," MPRA Paper 14243, University Library of Munich, Germany.
    19. Lackner, Mario & Sonnabend, Hendrik, 2021. "Coping with advantageous inequity—Field evidence from professional penalty kicking," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 91(C).
    20. Daniel Weimar & Katrin Scharfenkamp, 2019. "Effort reduction of employer‐to‐employer changers: Empirical evidence from football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(3), pages 277-291, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:54:y:2022:i:30:p:3505-3520. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.