Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus
Incentives in Economic Departments: Testing Tournaments?
(), Valerie Smeets
() and Frederic Warzynski
Abstract: Existing tests of tournament theory have recently been
for their failure to distinguish tournaments from other
have similar effects like standards and marginal
(Gibbs, 1994, 1996; Prendergast, 1999). In this
paper, we propose a
series of empirical tests that allow to make this
distinction. We use
a dataset of average wages by rank in US economic
the period 1977-1997 and link this information to
data to test whether wage gaps aﬀect the
productivity and cooperative
behavior of economists and to control for
marginal productivity theory.
We find that the wage gap is increasing
along the hierarchy, even when
controlling for production by rank.
Moreover, wages are more sensitive
to productivity for higher ranks. We
find some evidence that higher
wage gaps lead to higher productivity
but not that wage gaps depend
on the number of contestants nor that
they lead to less cooperation.
Keywords: incentives; sorting; tournaments; standards; marginal productivity; economic departments; (follow links to similar papers)
JEL-Codes: J00; M54; (follow links to similar papers)
31 pages, May 26, 2003
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