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Do Tournaments Have Incentive Effects?, Ronald G. Ehrenberg, Michael L. Bognanno Dec 1990

Do Tournaments Have Incentive Effects?, Ronald G. Ehrenberg, Michael L. Bognanno

Articles and Chapters

Much attention has been devoted to studying models of tournaments or situations in which an individual's payment depends only on his or her output or rank relative to that of other competitors. Academic interest derives from the fact that under certain sets of assumptions, tournaments have desirable normative properties because of the incentive structures they provide. Our paper uses nonexperimental data to test whether tournaments actually elicit effort responses. We focus on professional golf tournaments because information on the incentive structure (prize distribution) and measures of individual output (players' scores) are both available. We find strong support for the ...


The Incentive Effects Of Tournaments Revisited: Evidence From The European Pga Tour, Ronald G. Ehrenberg, Michael L. Bognanno Feb 1990

The Incentive Effects Of Tournaments Revisited: Evidence From The European Pga Tour, Ronald G. Ehrenberg, Michael L. Bognanno

Articles and Chapters

This analysis of data from the 1987 European Men's Professional Golf Association (PGA) Tour strongly supports the hypothesis that the level and structure of prizes in PGA tournaments influence players' performance. Specifically, players' performance appears to vary positively with both the total money prizes awarded in a tournament and the marginal return to effort in the final round of play (a value that varies among players largely depending on how the prize money is allocated among finishers of different ranks). The authors suggest that these results, together with the similar results of their earlier study of the 1984 U ...