2023 Volume 14 Issue 2 Pages 31-42
Tournaments (or relative evaluation) are a widely used incentive system. Under these incentive systems, there is a problem which is called heterogeneous contestant. Heterogeneous contestant is that tournament participants’ efforts are not fully exploited in case their ability are so much different. In this paper, we examine whether the problem of heterogeneous contests can be solved by giving monitoring authority to supervisors through laboratory experiments. The results revealed the following two points: (1) monitoring by supervisors elicits effort from the evaluators, and (2) in some cases, participants continue to choose a higher level of effort than the theory predicts. The results of this paper suggest that giving supervisors the authority to monitor may solve the problem of heterogeneous contestants and that the psychological factor of “wanting to win over other participants” has a non-negligible effect on predicting participants’ behavior under these incentive systems.
