The Effects of Tournament Horizon and the Percentage of Winners on Social Comparisons and Performance in Multi-Period Competitions

47 Pages Posted: 17 Aug 2016 Last revised: 30 Mar 2017

See all articles by Leslie Berger

Leslie Berger

Wilfrid Laurier University - School of Business & Economics

Theresa Libby

Kenneth G. Dixon School of Accounting - University of Central Florida

Alan Webb

University of Waterloo - School of Accounting and Finance

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Date Written: March 29, 2017

Abstract

We examine the effects of two important tournament design features, tournament horizon and percentage of winners on social comparisons and performance in a multi-period setting. Prior research has individually examined these two features, but we are the first to study their joint effects. We predict that because relative performance feedback is more meaningful in grand tournaments regarding the likelihood of future period outcomes (winning or losing) compared to repeated tournaments, individuals will engage more in social comparisons. In turn, by engaging more in social comparisons, we also predict performance will be higher in grand versus repeated tournaments. We also examine the extent to which the percentage of winners affects the strength of the predicted relations among tournament horizon, social comparisons and performance. Finally, we predict that repeated tournaments will be more effective at sustaining effort when the percentage of winners is high, but grand tournaments will be more effective when the percentage of winners is low. Results from a lab experiment with 400 undergraduate students support all of our predictions. Moreover, we find no evidence that the percentage of winners influences the impact of tournament horizon on social comparisons and overall performance. We identify implications for theory and practice.

Keywords: tournament, repeated, grand, percent winners, attribution

JEL Classification: M41

Suggested Citation

Berger, Leslie and Libby, Theresa and Webb, Alan, The Effects of Tournament Horizon and the Percentage of Winners on Social Comparisons and Performance in Multi-Period Competitions (March 29, 2017). AAA 2017 Management Accounting Section (MAS) Meeting, Available at SSRN: https://ssrn.com/abstract=2823927 or http://dx.doi.org/10.2139/ssrn.2823927

Leslie Berger (Contact Author)

Wilfrid Laurier University - School of Business & Economics ( email )

Waterloo, Ontario N2L 3C5
CANADA

Theresa Libby

Kenneth G. Dixon School of Accounting - University of Central Florida ( email )

Orlando, FL
United States

Alan Webb

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

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