Free DP Download 12 November 2021 - The Efficacy of Tournaments for Non-Routine Team Tasks

Friday, November 12, 2021

Florian Englmaier, Stefan Grimm, Dominik Grothe, David Schindler, Simeon Schudy CEPR Discussion Paper No. 16360 | July 2021


Tournaments are often used to improve performance in innovation contexts. Tournaments provide monetary incentives but also render teams' identity and social-image concerns salient. We study the effects of tournaments on team performance in a non-routine task and identify the importance of these behavioral aspects. In a natural field experiment (n > 1,700 participants), we vary the salience of team identity, social-image concerns, and whether teams face monetary incentives. Increased salience of team identity does not improve performance. Social-image motivates mainly the top-performing teams. Additional monetary incentives improve all teams' outcomes without crowding out teams' willingness to explore or perform similar tasks again.

You can also listen to a podcast where Florian Englmaier tells Tim Phillips about new research into what gives these teams the will to win.