The effect of communication in incentive systems—an experimental study

Harbring, Christine

doi:10.1002/mde.1266

Cited by 45 publications

(36 citation statements)

References 53 publications

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“…The findings of Bull et al (1987) have been replicated by a large number of experiments on rank-order tournaments (Schotter and Weigelt, 1992;Nalbantian and Schotter, 1997;Harbring andIrlenbusch, 2005, 2008;Orrison et al, 2004;Wu and Roe, 2005;Wu et al 2006;Harbring et al, 2007;Harbring and Lünser, 2008;Eriksson et al, 2009b;Sheremeta and Wu, 2011;Teyssier, 2012, 2013;Agranov and Tergiman, 2013). Several exceptions are Chen et al (2011), who observe over-expenditure in contests with asymmetric contestants, and , who observe twice as high effort levels than predicted in a tournament with minimum productivity requirements.…”

Section: Rank-order Tournamentsmentioning

confidence: 88%

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

2012

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Many economic, political and social environments can be described as contests in which agents exert costly efforts while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey provides a comprehensive review of experimental research on these three canonical contests. First, we review studies investigating the basic structure of contests, including the number of players and prizes, spillovers and externalities, heterogeneity, risk and incomplete information. Second, we discuss dynamic contests and multi-battle contests. Then we review studies examining sabotage, feedback, bias, collusion, alliances, group contests and gender, as well as field experiments. Finally, we discuss applications of contests and suggest directions for future research. IntroductionMany economic, political and social environments can be described as contests in which competing agents have the opportunity to expend scarce resources -such as effort, money, time, or troops -in order to affect the probabilities of winning prizes. Examples range from the competition for mates, college admission, patents, or promotions within firms, to the process of litigation or lobbying politicians, to elections, sports competitions, and violent global conflicts (Tullock, 1967;Krueger, 1974). As is obvious from this list, these environments have attracted considerable attention in applications in a wide range of fields, both in-and out-side of economics. They have also been studied extensively by economic theorists in what has become known as the field of contest theory (Konrad, 2009). Although this field continues to attract many young theorists, it has its roots in three models developed in the mid-seventies to early eighties: the Tullock (1980) model of rent-seeking, the Lazear and Rosen (1981) rank-order tournament model, and the all-pay auction (Hirshleifer and Riley, 1978;Nalebuff and Stiglitz, 1983;Dasgupta, 1986;Hillman and Riley, 1989). Despite the fact that the three models historically developed somewhat independently, they represent special cases of a general contest model that can be formulated in a unified framework.Despite an extensive and established theoretical literature, much less effort has been devoted to empirically investigate individual behavior in different contests and compare such behavior with theoretical predictions. The main reason is that it is not trivial to measure individual effort in the field since the researcher can only observe the performance of contestants, which is a function of effort, ability and luck (Ericsson and Charness, 1994). The majority of empirical studies use either firm level data (Prendergast, 1999) or sports data (Szymanski, 2003). Because it is typically difficult to measure the actual effort expended by players in the field, almost all of these studies focus solely on investigating whether the pattern of outcomes is consistent with the theoretical predictions.Controlled experimen...

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Section: Rank-order Tournamentsmentioning

confidence: 88%

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

2012

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“…Communication is an important and obvious way for team members to generate coordination processes in complex software development environments (Espinosa and Carmel 2003;Harbring 2006). The current literature defines the various characteristics of communication in the area of system or software development (Espinosa and Carmel 2003).…”

Section: Communication In Software Developmentmentioning

confidence: 99%

The impact of agile practices on communication in software development

et al. 2008

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Agile software development practices such as eXtreme Programming (XP) and SCRUM have increasingly been adopted to respond to the challenges of volatile business environments, where the markets and technologies evolve rapidly and present the unexpected. In spite of the encouraging results so far, little is known about how agile practices affect communication. This article presents the results from a study which examined the impact of XP and SCRUM practices on communication within software development teams and within the focal organization. The research was carried out as a case study in F-Secure where two agile software development projects were compared from the communication perspective. The goal of the study is to increase the understanding of communication in the context of agile software development: internally among the developers and project leaders and in the interface between the development team and stakeholders (i.e. customers, testers, other development teams). The study shows that agile practices improve both informal and formal communication. However, it further indicates that, in larger development situations involving multiple external stakeholders, a mismatch of adequate communication mechanisms can sometimes even hinder the communication.Empir Software Eng (The study highlights the fact that hurdles and improvements in the communication process can both affect the feature requirements and task subtask dependencies as described in coordination theory. While the use of SCRUM and some XP practices facilitate team and organizational communication of the dependencies between product features and working tasks, the use of agile practices requires that the team and organization use also additional plan-driven practices to ensure the efficiency of external communication between all the actors of software development.

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“…8 Finally, in the two individual treatments (INDIVIDUAL-INTER and INDIVIDUAL-NOCOMM), two groups were replaced with two individual players who competed for a prize of =60. This is similar to the tournament treatment in Harbring (2006), except that earlier study used a deterministic rather than lottery contest success function. In the INDIVIDUAL-INTER treatment the two players could communicate using a chat window for 60 seconds during each period, while no communication was allowed in the INDIVIDUAL-NOCOMM treatment.…”

Section: Experimental Design and Proceduresmentioning

confidence: 99%

Communication and efficiency in competitive coordination games

Cason

Sheremeta

Zhang

2012

Games and Economic Behavior

149

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Costless pre-play communication has been found to effectively facilitate coordination and enhance efficiency in games with Pareto-ranked equilibria. We report an experiment in which two groups compete in a weakest-link contest by expending costly efforts. Allowing intra-group communication leads to more aggressive competition and greater coordination than control treatments without any communication. On the other hand, allowing inter-group communication leads to less destructive competition. As a result, intra-group communication decreases while inter-group communication increases payoffs. Our experiment thus provides an example of an environment where communication can either enhance or damage efficiency. This contrasts sharply with experimental findings from public goods and other coordination games, where communication always enhances efficiency and often leads to socially optimal outcomes. JEL Classifications: C70, D72, H41

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The effect of communication in incentive systems—an experimental study

Cited by 45 publications

References 53 publications

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

The impact of agile practices on communication in software development

Communication and efficiency in competitive coordination games

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