TY  - RPRT
        AU  - Sheremeta, Roman M.
AU  - Wu, Steven Y.
        TI  - Testing Canonical Tournament Theory: On the Impact of Risk, Social Preferences and Utility Structure
        PY  - 2012/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 6304
        UR  - https://www.iza.org/index.php/publications/dp6304
        AB  - We use experiments to test comparative statics predictions of canonical tournament theory. Both the roles of principal and agent are populated by human subjects, allowing us to test predictions for both incentive responses and optimal tournament design. Consistent with theory, we observed an incentive effect from raising the winner's prize. However, we also observed several empirical puzzles that appeared to contradict theory. Controlling for social preferences did not resolve the puzzles, although social preferences do influence behavior. It turns out that the puzzles can be explained by the canonical model once the textbook assumption of separable agent utility is relaxed.
        KW  - tournaments
KW  - experiment
KW  - social preferences
KW  - contract theory
        ER  -