Adding Tournament to Tournament: The Interactive Effect of Team and Individual Incentives
type: CreativeWork
description: This study experimentally investigates the interactive effect of individual and team incentive systems on effort. Using economic and social identity theories, I examine whether both free-riding and collusion problems can be simultaneously mitigated when a combination of individual and team incentive systems are used. Consistent with the extended Nitzan's (1991) nested contest economic model and social identity theory (SIT), I find that when a between-team tournament exists, individuals are likely to exert greater effort, compared to when there is no such tournament. However, inconsistent with the joint maximization Nash equilibrium predictions from the model, I find that a within-team tournament has a positive effect on individuals' effort, as suggested by SIT. Further, the results show that in comparison, individuals facing both between-team and within-team competition are motivated to exert the greatest effort mitigating both free-riding and collusion problems.
abstract: This study experimentally investigates the interactive effect of individual and team incentive systems on effort. Using economic and social identity theories, I examine whether both free-riding and collusion problems can be simultaneously mitigated when a combination of individual and team incentive systems are used. Consistent with the extended Nitzan's (1991) nested contest economic model and social identity theory (SIT), I find that when a between-team tournament exists, individuals are likely to exert greater effort, compared to when there is no such tournament. However, inconsistent with the joint maximization Nash equilibrium predictions from the model, I find that a within-team tournament has a positive effect on individuals' effort, as suggested by SIT. Further, the results show that in comparison, individuals facing both between-team and within-team competition are motivated to exert the greatest effort mitigating both free-riding and collusion problems.
author: Tian, Yu
keywords: Business, Business Administration, Management, and Operations, collusion, free riding, individual incentive, team incentive, tournament
date published: 2011-01-01T08:00:00Z
date modified: 2026-07-24T04:37:34Z
provider: University of South Carolina
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of South Carolina