Discussion paper

DP16360 The Efficacy of Tournaments for Non-Routine Team Tasks

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.

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Citation

Englmaier, F, S Grimm, D Grothe, D Schindler and S Schudy (eds) (2021), “DP16360 The Efficacy of Tournaments for Non-Routine Team Tasks”, CEPR Press Discussion Paper No. 16360. https://cepr.org/publications/dp16360