Turning Up the Heat
The Discouraging Effect of Competition in Contests
Bibliographic Data
| ID | 10183073 |
|---|---|
| Authors | Dawei Fang (0000-0002-1541-9379, University of Gothenburg), Thomas H Noe (0000-0003-4068-1202, University of Oxford), Thomas Noe, Philipp Strack (0000-0002-7960-9243, Yale University) |
| Year | 2019 |
| Volume | 128 |
| Issue | 5 |
| Pages | 1940-1975 |
| Publication date | 2019-07-30 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/705670 |
| OpenAlex | W2775269544 |
| Language | EN |
| Citations received | 3 |
| References cited | 31 |
We study contests in which contestants are homogeneous and have convex effort costs. Increasing contest competitiveness, by making prizes more unequal, scaling up the competition, or adding new contestants, always discourages effort. These results have significant implications: although often criticized as evidence of laxity or cronyism, muting competition (e.g., adopting softer grading curves or less high-powered promotion systems) can both reduce inequality and increase output. Holding promotion contests at the division level rather than the firm level can boost employees’ effort. Our results are also consistent with personnel policies that feature egalitarian pay systems and dismissal of worst-performing employees
Competition (biology · CONTEST · Cronyism · Dismissal · Economics · Homogeneous · Industrial organization · Inequality · Labour economics · Microeconomics · Political science · Promotion (chess · Economic Policies and Impacts · Experimental Behavioral Economics Studies · Game Theory and Applications
| Citations per year | 0.75 |
|---|---|
| Citation span | 2022 - 2025 (4) |
| Highly cited | No |