The impact of management incentives in intergroup contests

Abstract

In intergroup contests a manager advises and motivates her group's members. Her rewards often depend on the subsequent contest expenditure of the members. I test whether such incentives undermine the credibility and effectiveness of a manager's efforts. In the different experimental treatments the managers either benefit from very high or low expenditure or get a predetermined payment. The results show that different management incentives shape the expenditure of the group members even if managers have an advisory role only. However, group members follow recommendations more closely if management compensation is not linked to contest expenditures.

Coopetition in Group Contest

“…Nalbantian and Schotter, 1997;Van Dijk et al, 2001) is that with proportional or egalitarian sharing rule contests between groups lead to high individual effort and little freeriding. More recent experimental studies (Abbink et al, 2010;Ahn et al, 2011;Cason et al, 2012Cason et al, , 2017Leibbrandt and Sääksvuori, 2012;Ke et al, 2013Ke et al, , 2015Eisenkopf, 2014;Sheremeta, 2011;Brookins et al, 2015;Bhattacharya, 2016;Chowdhury et al, 2016) also consistently find that average effort level (though often showing a declining pattern) is significantly higher than the equilibirum prediction. Sheremeta (2013) reports based on 30 studies that the median over-expenditure is 72%.…”

Misconduct and Leader Behaviour in Contests New Evidence from European Football

“…Also, as Elgar (2016) shows using data from the London 2012 Olympics and Paralympics, team captains often are considerably older than their team mates. However, the specific strategic role team leaders play in contests has become a focus of theoretical and empirical interest in economics only very recently (Eisenkopf, 2014;Gauriot & Page, 2015). By distinguishing between captains and other players, thus, our study is one of the first empirical inquiries which investigates whether holding a leadership role within a team in competition with another affects the likelihood of engaging in sabotage.…”

Cardinal Contests

“…For example, Reference[29] notes that most programming tasks on TaskCN attracted fewer than six participants and[50] notes that it is far more common to receive a small number of solutions for a task on TaskCN than some larger number of solutions 13. https://www.robinhood.org/prize 14. An immediate implication of Theorem A.3 is that if the noise terms ϵ i are drawn from a distribution with sufficiently high variance, then a unique symmetric pure-strategy equilibrium will exist for a wide range of values of n.…”