Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments?
We investigate whether tournament prizes that depend on joint output (“variable prize tournaments”) can alleviate the sabotage problem which is otherwise inherent in tournament structures. In a game-theoretical model with three contestants, we compare fixed-prize tournaments with tournaments where p...
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-09-01
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| Series: | Games |
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| Online Access: | https://www.mdpi.com/2073-4336/13/5/65 |
| _version_ | 1827650202814644224 |
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| author | Thomas Glökler Kerstin Pull Manfred Stadler |
| author_facet | Thomas Glökler Kerstin Pull Manfred Stadler |
| author_sort | Thomas Glökler |
| collection | DOAJ |
| description | We investigate whether tournament prizes that depend on joint output (“variable prize tournaments”) can alleviate the sabotage problem which is otherwise inherent in tournament structures. In a game-theoretical model with three contestants, we compare fixed-prize tournaments with tournaments where prizes depend on contestants’ joint output. Our analysis suggests that the incentives to sabotage in a fixed-prize tournament may be counteracted in a variable-prize tournament such that contestants no longer sabotage, but help one another. We empirically test the implications of our model with the help of a classroom experiment where we compare participants’ choices in a fixed-prize treatment (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>F</mi><mi>P</mi></mrow></semantics></math></inline-formula>) with those of a variable-prize treatment (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>V</mi><mi>P</mi></mrow></semantics></math></inline-formula>) in a between-subjects design. Given our parametrization, we expect efforts to be identical in both treatments, and we expect sabotage in the <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>F</mi><mi>P</mi></mrow></semantics></math></inline-formula> treatment and no sabotage in the <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>V</mi><mi>P</mi></mrow></semantics></math></inline-formula> treatment. In accordance with the model, we find that participants in the fixed-prize tournament sabotage one another, whereas participants in the variable-prize tournament help one another. At the same time, participants’ effort levels do not vary between the two treatments. |
| first_indexed | 2024-03-09T20:12:06Z |
| format | Article |
| id | doaj.art-daf90b4c1875435e9d90619543d62aca |
| institution | Directory Open Access Journal |
| issn | 2073-4336 |
| language | English |
| last_indexed | 2024-03-09T20:12:06Z |
| publishDate | 2022-09-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Games |
| spelling | doaj.art-daf90b4c1875435e9d90619543d62aca2023-11-24T00:12:58ZengMDPI AGGames2073-43362022-09-011356510.3390/g13050065Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments?Thomas Glökler0Kerstin Pull1Manfred Stadler2Faculty of Economics, Baden-Wuerttemberg Cooperative State University Loerrach, Hang Str. 46–50, 79539 Loerrach, GermanySchool of Business and Economics, University of Tuebingen, Naukler Str. 47, 72074 Tübingen, GermanySchool of Business and Economics, University of Tuebingen, Naukler Str. 47, 72074 Tübingen, GermanyWe investigate whether tournament prizes that depend on joint output (“variable prize tournaments”) can alleviate the sabotage problem which is otherwise inherent in tournament structures. In a game-theoretical model with three contestants, we compare fixed-prize tournaments with tournaments where prizes depend on contestants’ joint output. Our analysis suggests that the incentives to sabotage in a fixed-prize tournament may be counteracted in a variable-prize tournament such that contestants no longer sabotage, but help one another. We empirically test the implications of our model with the help of a classroom experiment where we compare participants’ choices in a fixed-prize treatment (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>F</mi><mi>P</mi></mrow></semantics></math></inline-formula>) with those of a variable-prize treatment (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>V</mi><mi>P</mi></mrow></semantics></math></inline-formula>) in a between-subjects design. Given our parametrization, we expect efforts to be identical in both treatments, and we expect sabotage in the <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>F</mi><mi>P</mi></mrow></semantics></math></inline-formula> treatment and no sabotage in the <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>V</mi><mi>P</mi></mrow></semantics></math></inline-formula> treatment. In accordance with the model, we find that participants in the fixed-prize tournament sabotage one another, whereas participants in the variable-prize tournament help one another. At the same time, participants’ effort levels do not vary between the two treatments.https://www.mdpi.com/2073-4336/13/5/65tournamentsvariable prizessabotagehelpexperiment |
| spellingShingle | Thomas Glökler Kerstin Pull Manfred Stadler Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments? Games tournaments variable prizes sabotage help experiment |
| title | Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments? |
| title_full | Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments? |
| title_fullStr | Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments? |
| title_full_unstemmed | Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments? |
| title_short | Do Output-Dependent Prizes Alleviate the Sabotage Problem in Tournaments? |
| title_sort | do output dependent prizes alleviate the sabotage problem in tournaments |
| topic | tournaments variable prizes sabotage help experiment |
| url | https://www.mdpi.com/2073-4336/13/5/65 |
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