Incentives versus sorting in tournaments: Evidence from a field experiment

Edwin Leuven
Hessel Oosterbeek
Joep Sonnemans
Bas van der Klaauw

Journal of Labor Economics 29, 637-658 (2011).

Existing field evidence on rank-order tournaments typically does not allow disentangling incentive and sorting effects. We conduct a field experiment illustrating the confounding effect. Students in an introductory microeconomics courses selected themselves into tournaments with low, medium, or high prizes for the best score at the final exam. Non-experimental analysis of the results would suggest that higher rewards induce higher productivity, but a comparison between treatment and control groups reveals that there is no such effect. This stresses the importance of non-random sorting into tournaments.

(Click here to download the PDF file containing the working paper)

Last updated: June 20, 2011.