Quitters Never Win: The (Adverse) Incentive Effects of Competing with Superstars Jennifer Brown Northwestern University September 2008 Presented by Justin Mathess S Tournament Style Competition S Proponents contend that within-firm contests fuel employee efforts S Spurred by the performance of other team members and possibility of rewards based on relative success, workers are motivated to exert high effort. S Does competition always bolster effort? Research S Research used data from Tiger Woods (Superstar) and the PGA Tour to examine the adverse incentive effect of a superstar in tournaments. S Includes round-by-round scores for all players in every PGA tournament from 1999 to 2006 and hole-by-hole data from 2002 to 2006 Research S Separated Exempt & Non-Exempt Player Scores S Separated Regular Tournaments from Regulars & Majors (Most of the time) S Other Variables included: Number of Rounds Major Event? World Golf Championship Course Length Event? Hot & Cold Dummy Quality of Field Wind Speed Recent Rainfall Purse Player Quality The “Superstar Effect” Numbers reflect Average Scores from 1999-2006 Exempt -5 Regular Events Players Non-Exempt -2.5 Players Tiger Woods -12 Major Tournaments Exempt 4 Players Non-Exempt 6 Players Tiger Woods -5 The “Superstar Effect” Exempt Players With Tiger Woods -3 Without Tiger Woods -7 Non-Exempt Players With Tiger Woods -1 Without Tiger Woods -3 Numbers reflect Average Scores from 1999-2006 Research Regression Results for Score in Regular and Major Tournaments 1999-2006 Regulars & Majors Regulars Exempt Players 0.9171 0.6259 Non-Exempt Players 0.6563 0.4901 Different Situations Examined First Round Effects S Players make critical effort-related decisions prior to the start of events. S Would the fact that Tiger was playing be apparent in the first round? YES!!! All Regular & Major Tournaments S Reported results using only players that made the cut S Does the Superstar effect lead to worse overall performance? YES!!! Different Situations Examined Tiger Played Courses S Woods plays less than 20/45 events per year and notoriously selects challenging courses. S Is the observed superstar effect driven by Wood’s course preference? NO!!! Tiger “Hot” or “Cold” S In 2000, Woods won three (3) majors and averaged a score of -13 in all events. S In 2003 and 2004, Woods failed to win a major event. S Does a “Tiger Slump” give rivals hope? YES!!! Different Situations Examined Tiger “In the Hunt” S Woods has never overcome more than a five-stroke deficit going into final round to win an event S If Woods is “in the hunt”, does it have an effect on other players? YES!!! Different Situations Examined Composition of the Field S Evidence suggests that golfers may amend their playing commitments to accommodate Wood’s schedule. S Are better players avoiding tournaments with Woods? NO!!! The “Distraction Factor” S Woods attracts the largest gallery following of all players on tour. S Can the superstar effect be attributed to increased media distraction when Woods participates in an event? NO!!! Different Situations Examined Scaring the Competition S Is Woods so intimidating that he scares his competition? S Could the superstar effect be a result of intimidation rather than reduced effort? NO!!! Risky Strategies. S Do golfers employ riskier strategies when they face the superstar relative to their play in more “winnable” tournaments? NO!!! Summarize 1. Superstar Leads to Reduced Performance 2. Higher Scores are not due to “riskier” strategies by competitors 3. Superstars must be “super” to create adverse effect.
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