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Incentives and selection in promotion contests: Is it possible to kill two birds with one stone?

Author

Listed:
  • Rudi Stracke
  • Wolfgang Höchtl
  • Rudolf Kerschbamer
  • Uwe Sunde
Abstract
This paper investigates whether a designer can improve both the incentive provision and the selection performance of a promotion contest by making the competition more (or less) dynamic. A comparison of static (one-stage) and dynamic (two-stage) contests reveals that this is not the case. A structural change that improves the performance in one dimension leads to a deterioration in the other dimension. This suggests that modifications of the contest structure are an alternative to strategic handicaps. A key advantage of structural handicaps over participant-specific ones is that the implementation of the former does not require prior identification of worker types.

Suggested Citation

  • Rudi Stracke & Wolfgang Höchtl & Rudolf Kerschbamer & Uwe Sunde, 2014. "Incentives and selection in promotion contests: Is it possible to kill two birds with one stone?," Working Papers 2014-09, Faculty of Economics and Statistics, Universität Innsbruck.
    • Handle: RePEc:inn:wpaper:2014-09
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    2. Hörtnagl-Pozzo, Tanja & Kerschbamer, Rudolf & Oexl, Regine & Stracke, Rudi & Sunde, Uwe, 2023. "Heterogeneity in rent-seeking contests with multiple stages: Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    3. Karpov, Alexander, 2015. "A theory of knockout tournament seedings," Working Papers 0600, University of Heidelberg, Department of Economics.
    4. Karol Kempa & Hannes Rusch, 2019. "Dissent, sabotage, and leader behaviour in contests: Evidence from European football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(5), pages 500-514, July.
    5. Mario Lackner, 2016. "Teams as Superstars: Effort and Risk Taking in Rank-Order Tournaments for Women and Men," Economics working papers 2016-13, Department of Economics, Johannes Kepler University Linz, Austria.

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    More about this item

    Keywords

    Promotion Contests; Heterogeneity; Incentives; Selection; Handicapping;
    All these keywords.

    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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