A new look at incentive effects and golf tournaments

Orszag, J. Michael

doi:10.1016/0165-1765(94)90080-9

Cited by 78 publications

(62 citation statements)

References 3 publications

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“…They find that the level and structure of prizes in PGA tournaments influence players' performance. However, Jonathan Orszag (1994) shows their results might not be robust once weather shocks are accounted for.…”

Section: Related Literaturementioning

confidence: 96%

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Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments

Guryan¹,

Kroft²,

Notowidigdo³

2007

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This paper uses random assignment in professional golf tournaments to test for peer effects in the workplace. We find no evidence that playing partners' ability affects performance, contrary to recent evidence on peer effects in the workplace from laboratory experiments, grocery scanners, and softfruit pickers. In our preferred specification we can rule out peer effects larger than 0.043 strokes for a one stroke increase in playing partners' ability. Our results complement existing studies on workplace peer effects and are useful in explaining how social effects vary across labor markets, across individuals, and with the form of incentives faced.Is an employee's productivity influenced by the productivity of his or her nearby coworkers? The answer to this question is important for the optimal organization of labor in a workplace and for the optimal design of incentives. 1, 2 Despite their importance, however, peer effects questions like this one are notoriously difficult to answer empirically. In this paper we exploit the conditional random assignment of golfers to playing partners in professional golf tournaments to identify peer effects among co-workers in a high-skill professional labor market. 3 A few other recent studies have found evidence that peer effects can be important in several work settings: among low-wage workers at a grocery store (Alexandre Mas and Enrico Moretti, 1 The relevance for the optimal design of incentives hinges on whether social effects are complements or substitutes for financial incentives. 2 Complementarities between an employee's productivity and the productivity of his peers may arise for at least three reasons: (1) individuals may learn from their co-workers about how best to perform a given task, (2) workers may be motivated to exert effort when they see their co-workers working hard or performing well or when they know their co-workers are watching, or (3) the nature of the production process may be such that the productivity of one worker mechanically influences the productivity of another worker directly (e.g. the assembly line). While the former two sources are 'behavioral', the latter is a mechanical effect that arises for purely structural or technological reasons. For clarity, we label the first two of these effects 'peer effects' and the last effect a 'production complementarity '. 3 See Charles Manski (1993) and Robert Moffitt (2001) for descriptions of the problems associated with estimating peer effects. In general, it is difficult to disintangle whether an observed correlation is the effect of the group's behavior on an individual's behavior ('endogenous effects'), the effect of the group's characteristics on an individual's behavior ('contextual effects'), or the correlation between observed and unobserved determinants of the outcome ('correlated effects'). An additional difficulty is what Manski calls the 'reflection problem'. To understand the reflection problem, consider trying to estimate the effect of individual i's behavior on individual j's behavi...

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Section: Related Literaturementioning

confidence: 96%

“…30 In this section, we report results from estimating variations of equation (2), with various measures of pre-determined ability. As discussed earlier, the correct randomization test includes the full set of tournament-by-category fixed effects along with the control .…”

Section: Verifying Random Assignment Of Peers In Professional Golfmentioning

confidence: 99%

Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments

Guryan¹,

Kroft²,

Notowidigdo³

2007

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“…The opportunity of using sports data has led to a growing empirical literature, testing existing theory with sports data 3 (see Ehrenberg and Bognanno 1990a, 1990b, Becker and Huselid 1992, Orszag 1994, Lynch and Zax 1998, 2000, Fernie and Metcalf 1999, Maloney and McCormick 2000, Melton and Zorn 2000, Sunde 2003). This paper uses sports data to investigate the impact of soccer players' relative income position on their performances.…”

Section: "Throughout History In All Stages Of Cultural Development mentioning

confidence: 99%

The Power of Positional Concerns

2008

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People care a great deal about their relative economic position and not solely about their absolute economic position. However, behavioral evidence is rare.This paper provides evidence on how the relative income position affects professional sports performances. Our analysis suggests that if a player's salary is below the average and this difference increases, his performance worsens.Moreover, the larger the income differences, the stronger positional concern effects are observable. We also find that the more the players are integrated, the more evident a relative income effect is. Finally, we find that positional effects are stronger among high performing teams.

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“…In a replication exercise, however, Orszag (1994) reports no significant effect of prize spread on performance.…”

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confidence: 91%

Interdependency in Performance

Haraguchi

Waddell

2007

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes.You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. licence. www.econstor.eu IZA DP No. 2944 If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated Interdependency in PerformanceKelii H. Haraguchi Glen R. Waddell The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 2944 July 2007 ABSTRACT Interdependency in Performance *We empirically model performance in the final round of a multiple-round tournament as a spatially autoregressive process, allowing us to sign and quantify the endogenous interactions between competitors. Doing so speaks to significant regularities in the data that suggest that a player's own performance generally tends to improve with the improving performance of competitors. However, we also find significant asymmetries in the interdependency of player performance that suggest that social interactions, even those found in a fairly straightforward game, can be rather complex. For example, while the positive complementarity in performance is particularly strong between tied players, own performance suffers in response to improving performance of lagging, lower-ability competitors. In our analysis we exploit data available from the Professional Golf Association's (PGA)2004 Tou...

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A new look at incentive effects and golf tournaments

Cited by 78 publications

References 3 publications

Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments

Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments

The Power of Positional Concerns

Interdependency in Performance

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