Essays on incentives in rank-order tournaments

This dissertation explores the effect of a dynamic tournament on strategic behavior. First, I examine the relevant theory and build a model of a two-player continuation contest. I find that there are two unique equilibria including one where an underdog can take the lead. Second, I analyze the effect that an educational signal from the Air Force Academy has on distant career outcomes. Using a regression discontinuity design, I show that the distinction of Distinguished Graduate has no effect on selection to In-residence Intermediate Developmental Education. Finally, I explore the impact that the tournament structure and the prize valuation have on strategic behavior of cadets at the Air Force Academy

Military Retention Incentives: Evidence from the Air Force Selective Reenlistment Bonus

The limited lateral entry and rigid pay structure for U.S. military personnel present challenges in retaining skilled individuals who have attractive options in the civilian labor market. One tool the services use to address this challenge is the Selective Reenlistment Bonus (SRB), which offers eligible personnel with particular skills a substantial cash bonus upon reenlistment. However, the sequential nature of the bonus offer and reenlistment process limits the ability to adjust manpower quickly, raising interest in research that estimates the effect of the SRB on retention. While this literature has acknowledged challenges including potential endogeneity of bonus levels, attrition, and reenlistment eligibility, many studies do not address these concerns adequately. This paper uses a comprehensive panel data set on Air Force enlisted personnel to estimate the effect of the SRB on retention rates. We exploit variation in bonus levels within skill groups, control for civilian labor market conditions, and model reenlistment eligibility to avoid common assumptions that lead to biased impact estimates. We find substantial heterogeneity in the effect of the bonus, with the largest effects on first-term service members and those whose skills have not historically received a substantial bonus. We also find evidence that the bonus affects the timing of reenlistment decisions in addition to their frequency