Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7371304 | Labour Economics | 2018 | 13 Pages |
Abstract
This paper examines “market-based tournaments”, in which firms use the tournament outcome to update their expectations about worker ability. A theoretical model offers several implications, which are unique to the market-based tournament and which we test in a laboratory experiment. The experiment supports most of the implications: We find that an increase in the variance of worker ability leads to a higher wage spread and that there is a non-monotonic relationship between this variance and effort. An increase in the marginal product of ability increases effort.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Lisa Dickmanns, Marc Gürtler, Oliver Gürtler,