Does Workplace Competition Increase Labor Supply? Evidence from a Field Experiment

Abstract

This paper develops a novel field experiment to test the implicit prediction of tournament theory that competition increases work time and can therefore contribute to the long work hours required in elite occupations. A majority of workers in the treatment without explicit financial incentives worked past the minimum time, but awarding a tournament prize increased work time and effort by over 80% and lowered costs of effort or output by over a third. Effort was similar with alternative (piece rate, low-prize tournament) bonuses. Men worked longer than women in the high-prize tournament, but for the same duration in other treatments.

Keywords: tournaments, performance pay, long work hours, elite occupations, gender

JEL Classification: M52, M55, J16, J22, J33, J44, D91