TY - JOUR T1 - Performance Responses to Competition Across Skill-Levels in Rank Order Tournaments: Field Evidence and Implications for Tournament Design JF - The RAND Journal of Economics Y1 - 2016 A1 - Boudreau, Kevin J. A1 - Lakhani, Karim R. A1 - Menietti, Michael KW - competitions KW - contests KW - innovation KW - innovation strategy KW - platforms KW - tournaments AB -

Tournaments are widely used in the economy to organize production and innovation. We study individual data on 2775 contestants in 755 software algorithm development contests with random assignment. The performance response to added contestants varies nonmonotonically across contestants of different abilities, precisely conforming to theoretical predictions. Most participants respond negatively, whereas the highest-skilled contestants respond positively. In counterfactual simulations, we interpret a number of tournament design policies (number of competitors, prize allocation and structure, number of divisions, open entry) and assess their effectiveness in shaping optimal tournament outcomes for a designer.

VL - 47 SN - 1756-2171 UR - http://onlinelibrary.wiley.com/doi/10.1111/1756-2171.12121/abstract IS - 1 JO - Performance responses to competition across skill levels in rank-order tournamentsThe RAND Journal of Economics ER -