Policy Seminars -- Winter 2008
Joint with the UCLA Anderson Global Economics Management Area (GEM)
| Speaker: Jennifer Brown -- UC Berkeley |
| Topic: Quitters Never Win: The (Adverse) Incentive Effects of Competing with Superstars |
| Date/Place/Time: January 24, 2008 / UCLA Anderson School -- Cornell Hall D310 / 10:15 A.M. to 11:45 A.M. |
| Abstract: Managers use internal competition to motivate worker effort, yet I present a simple economic model suggesting that the benefits of competition depend critically on Workers’ relative abilities--large differences in skill may reduce competitors’ efforts. This paper uses panel data from professional golfers and finds that the presence of a superstar in a rank-order tournament is associated with lower competitor performance. On average, higher-skill PGA golfers’ tournament scores are 0.8 strokes higher when Tiger Woods participates, relative to when Woods is absent. Lower-skill players’ scores appear unaffected by the superstar’s presence. The adverse superstar effect increases during Woods’s streaks and disappears during Woods’s slumps. There is no evidence that reduced performance is due to “riskier” play. |
| Links to papers: Click here for paper |