Contests for Status

By Benny Moldovanu, Aner Sela, Xianwen Shi. Journal of Political Economy, 2007

312 citations recorded by the source corpus.

We study the optimal design of organizations under the assumption that agents in a contest care about their relative position. A principal determines the number and size of status categories in order to maximize output. We first consider the pure status case without tangible prizes. Our results connect the optimal partition in status categories to properties of the distribution of ability among contestants. The top status category always contains a unique element. For distributions that have an increasing failure rate (IFR), a proliferation of status classes is optimal, whereas the optimal partition involves only two categories if the distribution of abilities is sufficiently concave. Moreover, for IFR distributions, a coarse partition with two status categories achieves at least half of the output obtained in the optimal partition with many categories. Finally, if status is derived solely from monetary rewards, we show that the optimal partition in status classes contains only two categories.

Subfields: Management Science and Operations Research, Safety Research

View Paper: https://www.semanticscholar.org/paper/f299a3bb14dfc5ec71cc81743ea29bdd89d5ef58

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Citations in the corpus

Rank Incentives: Evidence from a Randomized Workplace Experiment (2012, background): “…ranking per se, even when rankings have no financial consequences, which I refer to as rank incentives, as they directly affect self-image (Maslow, 1943, McClelland et al, 1953, Benabou and Tirole, 2006, Koszegi, 2006) and convey status (Frank, 1985, Moldovanu et al, 2007, Besley and Ghatak, 2008).”
The optimal multi-stage contest (2012, background): “The results on Sisyphus contest look striking. However, ( 20 ) reveals why the process of”
Rankings and Risk-Taking in the Finance Industry (2018, unknown): “Second, the strong focus on relative performance among professionals may have been (additionally) shaped by the business culture of the finance industry where rankings and relative performance are pervasive features which potentially improve a professionals’ self-image (Maslow, 1943; Bénabou and Tir”
Awards Unbundled: Evidence from a Natural Field Experiment (2014, background): “—Adam Smith, “Of the Origin of Ambition, and of the Distinction of Ranks,” The Theory of Moral Sentiments (1759) The innate human desire for approbation might make status awards a cost-effective tool to incentivize good performance (Besley and Ghatak, 2008; Moldovanu et al., 2007).”
Field experiments in labor economics (2010, background): “This information might have direct effects on productivity if individuals have concerns for their relative position or status (Moldovanu et al., 2007; Besley and Ghatak, 2008), inequality aversion (Fehr and Schmidt, 1999; Charness and Rabin, 2002) or conformity (Bernheim, 1994).”
A survey of experimental research on contests, all-pay auctions and tournaments (2014, background): “Moreover, across a wide range of specific contest models, multiple prizes may generate higher efforts when contestants are risk-averse (Krishna and Morgan 1998; Kalra and Shi 2001) or heterogeneous (Szymanski and Valletti 2005; Moldovanu et al. 2007).”
Field Experiments with Firms (2011, background): “In the fi nal discussion, we then draw together some common lessons from the studies presented to highlight some areas to which we think future research should be directed.”
Tournaments Without Prizes: Evidence from Personnel Records (2011, result): “We instead regard relative concerns whereby increases in others’ performance always has a negative effect on own utility (Frank, 1984; Fershtman et al., 2005; Moldovanu et al., 2007), as consistent with our findings.”
Getting More Work for Nothing? Symbolic Awards and Worker Performance (2011, background): “The model is based on Moldovanu et al. (2007) who study contests for pure status.”
Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis (2011, background): “P l ea s e s end an y que s t i on s r ega r d i n g t h i s po li cy t o pe r m i ss i on s @ i n f o r m s . o r g . have remarked on the importance of sociological and behavioral motivators of various kinds in contests (Altmann et al. 2008, Konrad 2009, Moldovanu et al. 2007).”