First-Place Loving and Last-Place Loathing: How Rank in the Distribution of Performance Affects Effort Provision

Published Online:https://doi.org/10.1287/mnsc.2017.2907

References

  • Abeler J, Falk A, Goette L, Huffman D (2011) Reference points and effort provision. Amer. Econom. Rev. 101(2):470–492.CrossrefGoogle Scholar
  • Angrist JD, Pischke JS (2008) Mostly Harmless Econometrics: An Empiricist’s Companion (Princeton University Press, Princeton, NJ).CrossrefGoogle Scholar
  • Ashraf N, Bandiera O, Lee SS (2014) Awards unbundled: Evidence from a natural field experiment. J. Econom. Behav. Organ. 100:44–63.CrossrefGoogle Scholar
  • Azmat G, Iriberri N (2010) The importance of relative performance feedback information: Evidence from a natural experiment using high school students. J. Public Econom. 94(7):435–452.CrossrefGoogle Scholar
  • Azmat G, Iriberri N (2016) The provision of relative performance feedback: An analysis of performance and satisfaction. J. Econom. Management Strategy 25(1):77–110.CrossrefGoogle Scholar
  • Baker GP, Jensen MC, Murphy KJ (1988) Compensation and incentives: Practice vs. theory. J. Finance 43(3):593–616.CrossrefGoogle Scholar
  • Bandiera O, Barankay I, Rasul I (2013) Team incentives: Evidence from a firm level experiment. J. Eur. Econom. Assoc. 11(5):1079–1114.CrossrefGoogle Scholar
  • Barankay I (2011) Rankings and social tournaments: Evidence from a crowd-sourcing experiment. Mimeo, University of Pennsylvania, Philadelphia.Google Scholar
  • Barankay I (2012) Rank incentives: Evidence from a randomized workplace experiment. Mimeo, University of Pennsylvania, Philadelphia.Google Scholar
  • Bellemare C, Lepage P, Shearer B (2010) Peer pressure, incentives, and gender: An experimental analysis of motivation in the workplace. Labour Econom. 17(1):276–283.CrossrefGoogle Scholar
  • Bhattacharya H, Dugar S (2012) Status incentives and performance. Managerial Decision Econom. 33(7–8):549–563.CrossrefGoogle Scholar
  • Blanes i Vidal J, Nossol M (2011) Tournaments without prizes: Evidence from personnel records. Management Sci. 57(10):1721–1736.LinkGoogle Scholar
  • Bø EE, Slemrod J, Thoresen TO (2015) Taxes on the Internet: Deterrence effects of public disclosure. Amer. Econom. J. Econom. Policy 7(1):36–62.CrossrefGoogle Scholar
  • Boyce CJ, Brown GDA, Moore SC (2010) Money and happiness: Rank of income, not income, affects life satisfaction. Psych. Sci. 21(4):471–475.CrossrefGoogle Scholar
  • Bradler C, Dur R, Neckermann S, Non A (2016) Employee recognition and performance: A field experiment. Management Sci. 62(11):3085–3099.LinkGoogle Scholar
  • Brown GDA, Gardner J, Oswald AJ, Qian J (2008) Does wage rank affect employees’ well-being? Indust. Relations 47(3):355–389.CrossrefGoogle Scholar
  • Burrows P, Loomes G (1994) The impact of fairness on bargaining behaviour. Empirical Econom. 19(2):201–221.CrossrefGoogle Scholar
  • Cadsby CB, Engle-Warnick J, Fang T, Song F (2014) Psychological incentives, financial incentives, and risk attitudes in tournaments: An artefactual field experiment. Department of Economics and Finance Discussion Paper 2014-03, University of Guelph, Guelph, Ontario, Canada.Google Scholar
  • Charness G, Masclet D, Villeval MC (2014) The dark side of competition for status. Management Sci. 60(1):38–55.LinkGoogle Scholar
  • Clark AE, Masclet D, Villeval MC (2010) Effort and comparison income: Experimental and survey evidence. Indust. Labor Relations Rev. 63(3):407–426.CrossrefGoogle Scholar
  • Clark AE, Westergård-Nielsen N, Kristensen N (2009) Economic satisfaction and income rank in small neighbourhoods. J. Eur. Econom. Assoc. 7(2–3):519–527.CrossrefGoogle Scholar
  • Coffey B, Maloney MT (2010) The thrill of victory: Measuring the incentive to win. J. Labor Econom. 28(1):87–112.CrossrefGoogle Scholar
  • Delfgaauw J, Dur R, Sol J, Verbeke W (2013) Tournament incentives in the field: Gender differences in the workplace. J. Labor Econom. 31(2):305–326.CrossrefGoogle Scholar
  • Dohmen T, Falk A, Fliessbach K, Sunde U, Weber B (2011) Relative versus absolute income, joy of winning, and gender: Brain imaging evidence. J. Public Econom. 95(3):279–285.CrossrefGoogle Scholar
  • Dutcher EG, Balafoutas L, Lindner F, Ryvkin D, Sutter M (2015) Strive to be first or avoid being last: An experiment on relative performance incentives. Games Econom. Behav. 94:39–56.CrossrefGoogle Scholar
  • Ebeling F, Fellner G, Wahlig J (2012) Peer pressure in multi-dimensional work tasks. Economics Working Paper 57, University of Cologne, Koln, Germany.Google Scholar
  • Ehrenberg RG, Bognanno ML (1990) Do tournaments have incentive effects? J. Political Econom. 98(6):1307–1324.CrossrefGoogle Scholar
  • Ellingsen T, Johannesson M (2007) Paying respect. J. Econom. Perspect. 21(4):135–150.CrossrefGoogle Scholar
  • Elsner B, Isphording IE (2015) A big fish in a small pond: Ability rank and human capital investment. IZA Discussion Paper 9121, Institute of Labor Economics, Bonn, Germany.Google Scholar
  • Eriksson T, Mao L, Villeval MC (2017) Saving face and group identity. Experiment. Econom. 20(3):622–647.CrossrefGoogle Scholar
  • Eriksson T, Poulsen A, Villeval MC (2009) Feedback and incentives: Experimental evidence. Labour Econom. 16(6):679–688.CrossrefGoogle Scholar
  • Falk A, Ichino A (2006) Clean evidence on peer effects. J. Labor Econom. 24(1):39–57.CrossrefGoogle Scholar
  • Fershtman C, Gneezy U (2011) The tradeoff between performance and quitting in high power tournaments. J. Eur. Econom. Assoc. 9(2):318–336.CrossrefGoogle Scholar
  • Festinger L (1954) A theory of social comparison processes. Human Relations 7(2):117–140.CrossrefGoogle Scholar
  • Frank RH (1985) Choosing the Right Pond: Human Behavior and the Quest for Status (Oxford University Press, New York).Google Scholar
  • Freeman RB, Gelber AM (2010) Prize structure and information in tournaments: Experimental evidence. Amer. Econom. J. Appl. Econom. 2(1):149–164.CrossrefGoogle Scholar
  • Frey BS (2007) Awards as compensation. Eur. Management Rev. 4(1):6–14.CrossrefGoogle Scholar
  • Genakos C, Pagliero M (2012) Interim rank, risk taking, and performance in dynamic tournaments. J. Political Econom. 120(4):782–813.CrossrefGoogle Scholar
  • Georganas S, Tonin M, Vlassopoulos M (2015) Peer pressure and productivity: The role of observing and being observed. J. Econom. Behav. Organ. 117:223–232.CrossrefGoogle Scholar
  • Gerhards L, Siemer N (2014) Private versus public feedback—The incentive effects of symbolic awards. Economics Working Paper 2014-01, Aarhus University, Aarhus, Denmark.Google Scholar
  • Gibbons R, Murphy KJ (1990) Relative performance evaluation for chief executive officers. Indust. Labor Relations Rev. 43(3):30S–51S.CrossrefGoogle Scholar
  • Gill D, Prowse V (2012) A structural analysis of disappointment aversion in a real effort competition. Amer. Econom. Rev. 102(1):469–503.CrossrefGoogle Scholar
  • Gill D, Prowse V (2014) Gender differences and dynamics in competition: The role of luck. Quant. Econom. 5(2):351–376.CrossrefGoogle Scholar
  • Gill D, Stone R (2010) Fairness and desert in tournaments. Games Econom. Behav. 69(2):346–364.CrossrefGoogle Scholar
  • Gino F, Staats BR (2011) Driven by social comparisons: How feedback about coworkers’ effort influences individual productivity. HBS Working Paper 11-078, Harvard Business School, Boston.Google Scholar
  • Gneezy U, Rustichini A (2004) Gender and competition at a young age. Amer. Econom. Rev. Papers Proc. 94(2):377–381.CrossrefGoogle Scholar
  • Goerg SJ, Kube S, Radbruch J (2017) The effectiveness of incentive schemes in the presence of implicit effort costs. IZA Discussion Paper 10546.Google Scholar
  • Greiner B (2015) Subject pool recruitment procedures: Organizing experiments with ORSEE. J. Econom. Sci. Assoc. 1(1):114–125.CrossrefGoogle Scholar
  • Grote RC (2005) Forced Ranking: Making Performance Management Work (Harvard Business School Press, Boston).Google Scholar
  • Hannan RL, Krishnan R, Newman AH (2008) The effects of disseminating relative performance feedback in tournament and individual performance compensation plans. Accounting Rev. 83(4):893–913.CrossrefGoogle Scholar
  • Hannan RL, McPhee GP, Newman AH, Tafkov ID (2013) The effect of relative performance information on performance and effort allocation in a multi-task environment. Accounting Rev. 88(2):553–575.CrossrefGoogle Scholar
  • Hazels B, Sasse CM (2008) Forced ranking: A review. SAM Advanced Management J. 73(2):35–39.Google Scholar
  • Heffetz O, Frank RH (2011) Preferences for status: Evidence and economic implications. Benhabib J, Jackson MO, Bisin A, eds. Handbook of Social Economics, Vol. 1A (North-Holland, Amsterdam), 69–91.CrossrefGoogle Scholar
  • Holmstrom B, Milgrom P (1991) Multitask principal-agent analyses: Incentive contracts, asset ownership, and job design. J. Law Econom. Organ. 7:24–52.CrossrefGoogle Scholar
  • Huberman BA, Loch CH, Önçüler A (2004) Status as a valued resource. Soc. Psych. Quart. 67(1):103–114.CrossrefGoogle Scholar
  • Iso-Ahola SE, Dotson CO (2014) Psychological momentum: Why success breeds success. Rev. General Psych. 18(1):19–33.CrossrefGoogle Scholar
  • Jalava N, Joensen JS, Pellas E (2015) Grades and rank: Impacts of non-financial incentives on test performance. J. Econom. Behav. Organ. 115:161–196.CrossrefGoogle Scholar
  • Kosfeld M, Neckermann S (2011) Getting more work for nothing? Symbolic awards and worker performance. Amer. Econom. J. Microeconomics 3(3):86–99.CrossrefGoogle Scholar
  • Kuhnen CM, Tymula A (2012) Feedback, self-esteem, and performance in organizations. Management Sci. 58(1):94–113.LinkGoogle Scholar
  • Kuziemko I, Buell RW, Reich T, Norton MI (2014) “Last-place aversion”: Evidence and redistributive implications. Quart. J. Econom. 129(1):105–149.CrossrefGoogle Scholar
  • Lazear EP, Rosen S (1981) Rank-order tournaments as optimum labor contracts. J. Political Econom. 89(5):841–864.CrossrefGoogle Scholar
  • Legge S, Schmid L (2016) Media attention and betting markets. Eur. Econom. Rev. 87:304–333.CrossrefGoogle Scholar
  • Lount RB Jr, Wilk SL (2014) Working harder or hardly working? Posting performance eliminates social loafing and promotes social laboring in workgroups. Management Sci. 60(5):1098–1106.LinkGoogle Scholar
  • Malcomson JM (1984) Work incentives, hierarchy, and internal labor markets. J. Political Econom. 92(3):486–507.CrossrefGoogle Scholar
  • Mas A, Moretti E (2009) Peers at work. Amer. Econom. Rev. 99(1):112–145.CrossrefGoogle Scholar
  • Miller GA (1995) WordNet: A lexical database for English. Comm. ACM 38(11):39–41.CrossrefGoogle Scholar
  • Moers F (2005) Discretion and bias in performance evaluation: The impact of diversity and subjectivity. Accounting Organ. Soc. 30(1):67–80.CrossrefGoogle Scholar
  • Murphy R, Weinhardt F (2014) Top of the class: The importance of ordinal rank. CESifo Working Paper 4815, CESifo.Google Scholar
  • Murthy US (2010) The effect of relative performance information under different incentive schemes on performance in a production task. Mimeo, University of South Florida, Gainesville.Google Scholar
  • Murthy US, Schafer BA (2011) The effects of relative performance information and framed information systems feedback on performance in a production task. J. Inform. Systems 25(1):159–184.CrossrefGoogle Scholar
  • Niederle M, Vesterlund L (2007) Do women shy away from competition? Do men compete too much? Quart. J. Econom. 122(3):1067–1101.CrossrefGoogle Scholar
  • Prendergast C (1999) The provision of incentives in firms. J. Econom. Literature 37(1):7–63.CrossrefGoogle Scholar
  • Propper C, Wilson D (2003) The use and usefulness of performance measures in the public sector. Oxford Rev. Econom. Policy 19(2):250–267.CrossrefGoogle Scholar
  • Rosaz J, Slonim R, Villeval MC (2012) Quitting and peer effects at work. IZA Discussion Paper 6475, IZA Institute of Labor Economics, Bonn, Germany.Google Scholar
  • Rustichini A (2008) Dominance and competition. J. Eur. Econom. Assoc. 6(2–3):647–656.CrossrefGoogle Scholar
  • Sheremeta RM (2010) Experimental comparison of multi-stage and one-stage contests. Games Econom. Behav. 68(2):731–747.CrossrefGoogle Scholar
  • Tafkov ID (2013) Private and public relative performance information under different compensation contracts. Accounting Rev. 88(1):327–350.CrossrefGoogle Scholar
  • Tincani MM (2015) Heterogeneous peer effects and rank concerns: Theory and evidence. Mimeo, University College London, London.Google Scholar
  • Tran A, Zeckhauser R (2012) Rank as an inherent incentive: Evidence from a field experiment. J. Public Econom. 96(9):645–650.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.