Communication, cooperation and collusion in team tournaments - An experimental study

We study the effects of communication in an experimental tournament between teams. When teams, rather than individuals, compete for a prize there is a need for intra-team coordination in order to win the inter-team competition. Introducing communication in such situations may have ambiguous effects on effort choices. Communication within teams may promote higher efforts by mitigating the internal free-rider problem. Communication between competing teams may lead to collusion, thereby reducing efforts. In our experiment we control the channels of communication by letting subjects communicate through an electronic chat. We find, indeed, that communication within teams increases efforts and communication between teams reduces efforts. We use team members’ dialogues to explain these effects of communication, and check the robustness of our results

Communication, cooperation and collusion in team tournaments - An experimental study

We study the effects of communication in an experimental tournament between teams. When teams, rather than individuals, compete for a prize there is a need for intra-team coordination in order to win the inter-team competition. Introducing communication in such situations may have ambiguous effects on effort choices. Communication within teams may promote higher efforts by mitigating the internal free-rider problem. Communication between competing teams may lead to collusion, thereby reducing efforts. In our experiment we control the channels of communication by letting subjects communicate through an electronic chat. We find, indeed, that communication within teams increases efforts and communication between teams reduces efforts. We use team members’ dialogues to explain these effects of communication, and check the robustness of our results.Tournament; Team decision making; Communication; Collusion; Free-riding; ExperimentKommunikation; Kollusion; Trittbrettfahrerverhalten; Experiment

Psychological pressure in competitive environments: Evidence from a randomized natural experiment: Comment

Apesteguia and Palacios-Huerta (forthcoming) report for a sample of 129 shootouts from various seasons in ten different competitions that teams kicking first in soccer penalty shootouts win significantly more often than teams kicking second. Collecting data for the entire history of six major soccer competitions we cannot replicate their result. Teams kicking first win only 53.4% of 262 shootouts in our data, which is not significantly different from random. Our findings have two implications: (1) Apesteguia and Palacios-Huerta?s results are not generally robust. (2) Using specific subsamples without a coherent criterion for data selection might lead to non-representative findings.Tournament, first-mover advantage, psychological pressure, field experiment, soccer, penalty shootouts

Technology Choice and Incentives under Relative Performance Schemes

We identify a new problem that may arise when heterogeneous workers are motivated by relative performance schemes: If workers’ abilities and the production technology are complements, the firm may prefer not to adopt a more advanced technology even though this technology would costlessly increase each worker’s productivity. Due to the complementarity between ability and technology, under technology adoption the productivity of a more able worker increases more strongly than the productivity of a less able colleague, thereby reducing the motivation of both workers to exert effort under a relative incentive scheme. We show that this adverse incentive effect is dominant and, consequently, keeps the firm from introducing a better production technology if talent uncertainty is sufficiently high and/or monitoring of workers is sufficiently precise.complementarities; heterogeneous workers; production technology; tournament.

Sabotage in Tournaments: Evidence from a Laboratory Experiment

Although relative performance schemes are pervasive in organizations reliable empirical data on induced sabotage behavior is almost non-existent. We study sabotage in tournaments in a controlled laboratory experiment and are able to confirm one of the key insights from theory: effort and sabotage increase with the wage spread. Additionally, we find that even in the presence of tournament incentives, agents react reciprocally to higher wages, which mitigates the sabotage problem. Destructive activities are reduced by explicitly calling them by their name 'sabotage'. Communication among principal and agents curbs sabotage due to agreements on flat prize structures and increased output.sabotage, tournament, reciprocity, relative performance scheme, experiment

Football Championships and Jersey Sponsors' Stock Prices: An Empirical Investigation

Corporate sports sponsorship is an important part of many companies? corporate communication strategy. We take the example of major football tournaments to show that sponsorship indeed affects the sponsor?s (stock) market value. We find a statistically significant impact of football results (at an individual game level) of the seven most important football nations at European and World Championships on the stock prices of jersey sponsors. In general, the more important a match and the less expected its result, the higher its impact. In addition, we find a form of ?mere exposure?-effect which contradicts the efficient markets hypothesis.Sports sponsorship, Advertising, Stock market efficiency

Tale of Two Green Communities: Energy Informatics and Social Competition on Energy Conservation Behavior

This study explores whether providing information on energy consumption is effective in changing energyconsumption behavior. More specifically, in groups with collectivist culture, energy informatics have a significantrole in inducing active participation and engagement in energy conservation efforts. Using data collected fromenergy monitoring competitions conducted in student residence halls of a university, I find that energy competitionhas positive influence in reducing energy consumption for cohesive dorms, whereas it has adverse effect for lesscohesive ones . The findings of the study indicate suggest that the role of information on the energy saving isconditional on existing culture in communities. I discuss the managerial implications of the findings

Who is going to save us now? Bureaucrats, Politicians and Risky Tasks

The paper compares the policy choices regarding risk-transfer against low-probability-high-loss events between elected and appointed public officials. Empirical evidence using data on U.S. municipality-level shows that appointed city managers are more likely to adopt federal risk-transfer regimes. It is argued that the variation in the level of insurance activity emerges from the different incentive schemes each government form is facing. Controlling for spatial dependencies further shows that the participation decision in the insurance program significantly depends on the decision of neighboring communities.Politicians, bureaucrats, decision making under uncertainty, flood insurance, spatial econometrics

Leading by Words: A Voluntary Contribution Experiment With One-Way Communication

In this paper, we study a voluntary contribution mechanism with one-way communication. The relevance of one person's words is assessed by assigning exogenously the role of the "communicator" to one group member. Contrary to the view that the mutual exchange of promises is necessary for the cooperation-enhancing effect of communication, we ï¬nd that, compared to a standard voluntary contribution mechanism with no communication, one-way communication signiï¬cantly increases contributions and renders them stable over time. Moreover, the positive effects of one-way communication persist even when communication is one-shot.Public goods experiment, Computer-mediated communication, Cheap-talk, Cooperation

Reducing Efficiency through Communication in Competitive Coordination Games

Costless pre-play communication has been found to effectively facilitate coordination and enhance efficiency by increasing individual payoffs in games with Pareto-ranked equilibria. We report an experiment in which two groups compete in a weakest-link contest by expending costly efforts. Allowing group members to communicate before choosing efforts leads to more aggressive competition and greater coordination, but also results in substantially lower payoffs than a control treatment without communication. Our experiment thus provides evidence that communication can reduce efficiency in competitive coordination games. This contrasts sharply with experimental findings from public goods and other coordination games, where communication enhances efficiency and often leads to socially optimal outcomes.Contest; Between-group Competition; Within-group Competition; Cooperation; Coordination; Free-riding; Experiments