Daan Van Soest
Information about this author at RePEc
NBER Working Papers and Publications
|March 2014||On the Role of Group Size in Tournaments: Theory and Evidence from Lab and Field Experiments|
with John List, Jan Stoop, Haiwen Zhou: w20008
Both private and public organizations constantly grapple with incentive schemes to induce maximum effort from agents. We begin with a theoretical exploration of optimal contest design, focusing on the number of competitors. Our theory reveals a critical link between the distribution of luck and the number of contestants. We find that if there is considerable (little) mass on good draws, equilibrium effort is an increasing (decreasing) function of the number of contestants. Our first test of the theory implements a laboratory experiment, where important features of the theory can be exogenously imposed. We complement our lab experiment with a field experiment, where we rely on biological models complemented by economic models to inform us of the relevant theoretical predictions. In bo...