Task difficulty, incentive effects, and the selection of high-variance strategies: an experimental examination of tournament behavior

Vandegrift, Donald; Brown, Paul

doi:10.1016/s0927-5371(03)00033-2

Cited by 30 publications

(32 citation statements)

References 25 publications

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“…This failure to find an effect across the team-production and piece-rate conditions occurs despite a series of studies that have found strong effects from other incentive schemes (e.g. tournaments) using the MCPL task employed here (Brown, 1995(Brown, , 1998Vandegrift and Brown, 2003;Vandegrift et al, 2007;Vandegrift and Yavas, 2009). However, the differences in the performance of men and women across the two conditions are striking.…”

Section: Methodsmentioning

confidence: 83%

“…See Balzer et al (1992) and Goldstein and Hogarth (1997) for reviews of research using MCPL tasks by psychologists. See Schmalensee (1976), Bolle (1988), Brown (1995Brown ( , 1998, Vandegrift and Brown (2003), Vandegrift et al (2007), Vandegrift and Yavas (2009) choice between a piece rate and team production in the team production condition. Our design is intended to capture a typical employment relation where an individual is hired and assigned to a team.…”

Section: Notesmentioning

confidence: 99%

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An experimental test of behavior under team production

Vandegrift

Yavaş

2010

Manage. Decis. Econ.

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This study reports experiments that examine behavior under team production and a piece rate. In the experiments, participants complete a forecasting task and are rewarded based on the accuracy of their forecasts. In the piece-rate condition, participants are paid based on their own performance, whereas the team-production condition rewards participants based on the average performance of the team. Overall, there is no statistically significant difference in performance between the conditions. However, this result masks important differences in the behavior of men and women across the conditions. Men in the team-production condition increase their performance relative to men in the piece-rate condition. However, this gap in male performances across conditions diminishes over the course of the experiment. In contrast, women in the team-production condition show significantly lower performance than the women in the piece rate. As a consequence of these differences, men in the team-production condition show significantly better performance than women in the team-production condition. We also find evidence that men show stronger performance when they are in teams with a larger variation in skill level. Copyright r 2010 John Wiley & Sons, Ltd. INTRODUCTIONUnder team production, groups rather than individuals are responsible for a set of tasks and compensation is based on the performance of the group. Because compensation is based on group performance, theoretical models of team production suggest that team members will free ride on the efforts of others (i.e. shirk). If total returns are divided evenly among a team with n members, team members incur the full cost of their effort while they receive only 1/n of the marginal gains from the effort. Consequently, effort levels are sub-optimal. Although theoretical models suggest that team production may lower worker productivity, firms often opt to reward workers based on team performance anyway. For instance, a recent survey finds that 26% of firms used team rewards (McClurg, 2001).To further advance understanding of behavior under team production, we conduct a series of experiments. We compare behavior under team production and a piece-rate payment scheme and examine the likely causes of the mixed results on shirking in team production. In the experiments, participants complete a real-effort forecasting task and are rewarded based on the accuracy of their forecasts. The experimental task is designed to allow measurement of both individual contributions and team performance.1 Participants were randomly assigned to one of two conditions. In the piece-rate condition, participants are paid based on their own performance, whereas the team-production condition rewards participants based on the average performance of the team. In each condition, participants produce forecasts for twenty rounds. In each round, participants receive feedback on their forecast error and earnings. In the team-production condition, participants also receive information on the forecast error of the tea...

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Section: Methodsmentioning

confidence: 83%

Section: Notesmentioning

confidence: 99%

An experimental test of behavior under team production

Vandegrift

Yavaş

2010

Manage. Decis. Econ.

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“…When the managers face tournament incentives, they increase the risk in their portfolios if their mid-year performance is below average. Vandegrift and Brown (2003) employ a skill-based forecasting task to test the effect of changes in task difficulty on tournament outcomes. They find that stronger incentives do not lead to increased performance when the task is simple.…”

Section: Introductionmentioning

confidence: 99%

“…5 However, modeling "effort" as a monetary cost significantly decreases the probability that self-confidence will play a role in decisions. Because of the apparent importance of a skill-based task in inducing overconfidence, we follow Camerer andLovallo (1999), van Dijk et al (2001), and Vandegrift and Brown (2003) and adopt a skill-based task that allows differences in ability among the participants to arise endogenously.…”

Section: Introductionmentioning

confidence: 99%

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Incentive effects and overcrowding in tournaments: An experimental analysis

2007

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This study reports experiments that examine outcomes when agents choose between a payment scheme that rewards based on absolute performance (i.e., piece rate) and a scheme that rewards based on relative performance (i.e., a tournament). Holding total payments in the tournament constant, performance is higher when the tournament option is winner-take-all compared to a graduated tournament (i.e., second and third-place performers also receive a payment). Performance is higher in the winner-take all tournaments even among participants that choose the piece-rate option. While there is a modest amount of overcrowding, there are no significant differences in overcrowding across conditions. Entry rates into the tournament and the relative ability of tournament entrants (compared to non-entrants in the same condition) are higher in the graduated tournament condition than the winner-take-all conditions. Consequently, the winner-take-all tournament is more efficient than the graduated tournament (incentive effects are stronger and the overcrowding is about the same), but the graduated tournament provides a more effective mechanism to identify the most capable performer in a talent pool. Copyright Economic Science Association 2007Tournament, Overcrowding, Experiment, Incentive effects,

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Is a large award truly attractive to solvers? The impact of award size on crowd size in innovation contests

Liu

Hatton

Kull

et al. 2020

J of Ops Management

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Firms increasingly use human crowds to solve their innovation related needs. Innovation sourcing managers who sponsor innovation contests seek to maximize crowd size to increase the chance of creative outcomes. One strategy they use is to set an award size. Although many studies have examined the influence of award size on crowd size in innovation contests, the empirical findings are inconsistent and suggest further empirical study is needed. Drawing from expectancy‐value theory, we propose that award size and crowd size are related to one another in the form of an inverted U‐shape, namely that moderate awards maximize crowd size. Additional propositions cover contingencies around the number of awards and task difficulty of an innovation contest. Based on data representing 5342 programming innovation contests, our empirical analyses confirm the inverted U‐shaped relationship and indicate that the number of awards and task difficulty steepen the inverted U‐shaped relationship. These results add nuanced, theoretical understanding of how innovation contests work. The findings indicate that innovation sourcing managers should set award sizes at moderate levels, and that they should experiment with slightly larger or smaller awards to see if it impacts crowd size in their context.

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Task difficulty, incentive effects, and the selection of high-variance strategies: an experimental examination of tournament behavior

Cited by 30 publications

References 25 publications

An experimental test of behavior under team production

An experimental test of behavior under team production

Incentive effects and overcrowding in tournaments: An experimental analysis

Is a large award truly attractive to solvers? The impact of award size on crowd size in innovation contests

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