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Helping under a Combination of Team and Tournament Incentives

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  • Danilov, Anastasia

    (University of Cologne)

  • Irlenbusch, Bernd

    (University of Cologne)

  • Harbring, Christine

    (RWTH Aachen University)

Abstract

We study how help can be fostered by means of a team bonus in the presence of rank-order tournaments. In a simple model we combine elements of relative rewards and a team bonus and study their effect on effort, help and sabotage. Quite intuitively the theoretical analysis suggests that team members help less as relative rewards increase. This problem is mitigated by a team bonus that is proportional to the output of the whole team. We compare different parameter constellations of the theoretical benchmark with behavior observed in a one-shot experiment.

Suggested Citation

  • Danilov, Anastasia & Irlenbusch, Bernd & Harbring, Christine, 2019. "Helping under a Combination of Team and Tournament Incentives," IZA Discussion Papers 12267, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12267
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    Cited by:

    1. Subhasish M. Chowdhury & Anastasia Danilov & Martin G. Kocher, 2023. "The Lifecycle of Affirmative Action Policies and Its Effect on Effort and Sabotage Behavior," Rationality and Competition Discussion Paper Series 401, CRC TRR 190 Rationality and Competition.
    2. Heursen, Lea, 2023. "Does relative performance information lower group morale?," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 547-559.
    3. Kohei Daido & Takeshi Murooka, 2022. "The Provision of High-powered Incentives under Multitasking," OSIPP Discussion Paper 22E005, Osaka School of International Public Policy, Osaka University.
    4. Thomas Glökler & Kerstin Pull & Manfred Stadler, 2022. "Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments?," Games, MDPI, vol. 13(5), pages 1-20, September.
    5. Achard, Pascal & Suetens, Sigrid, 2023. "The Causal Effect of Ethnic Diversity on Support for Redistribution and the Role of Discrimination," Other publications TiSEM a5e6e0cd-5e07-4a24-a15c-a, Tilburg University, School of Economics and Management.
    6. Mixon Jr., Franklin G. & Gómez-Mejia, Luis R., 2020. "The Competitive Struggle to Win Tournaments: The Allies’ Race to Capture Adolf Hitler’s Eagle’s Nest," American Business Review, Pompea College of Business, University of New Haven, vol. 23(1), pages 3-17, May.
    7. Anik Ashraf, 2022. "Performance Ranks, Conformity, and Cooperation: Evidence from a Sweater Factory," CESifo Working Paper Series 9591, CESifo.
    8. Achard, Pascal & Suetens, Sigrid, 2023. "The Causal Effect of Ethnic Diversity on Support for Redistribution and the Role of Discrimination," Discussion Paper 2023-013, Tilburg University, Center for Economic Research.
    9. E. Glenn Dutcher & Regine Oexl & Dmitry Ryvkin & Tim Salmon, 2021. "Competitive versus cooperative incentives in team production with heterogeneous agents," Working Papers 2021-26, Faculty of Economics and Statistics, Universität Innsbruck.
    10. Loberg, Linda & Nüesch, Stephan & Foege, Johann Nils, 2021. "Forced distribution rating systems and team collaboration," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 18-35.
    11. Shenkman, Evgenia & Coates, Dennis & Chadov, Aleksei & Parshakov, Petr, 2022. "Team vs. individual tournament: An organizer's dilemma," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 476-492.
    12. Eric Mao, 2023. "The Incentive Effects of Tournaments and Peer Effects in Team Production: Evidence from Esports," Journal of Sports Economics, , vol. 24(2), pages 174-192, February.

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    More about this item

    Keywords

    help; relative rewards; team incentives; experiment;
    All these keywords.

    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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