Abstract
Tournament theory is a theory of promotion-based incentives which also contributes to the understanding of firms’ wage structures and individual earnings. In tournaments wage-rank differentials act as an incentive scheme when firms cannot directly observe employees’ effort. Empirical evidence is mainly from sports and lab experiments while there are fewer studies of businesses and organizations.
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Eriksson, T. (2018). Tournaments. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2950
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2950
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