Quitters Never Win: The (Adverse) Incentive Effects of Competing by T03qs93


									 Quitters Never Win: The
(Adverse) Incentive Effects
   of Competing with
               Jennifer Brown
          Northwestern University
               September 2008
         Presented by Justin Mathess

Tournament Style Competition

S Proponents contend that within-firm contests fuel employee

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?

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

S Separated Exempt & Non-Exempt Player Scores

S Separated Regular Tournaments from Regulars & Majors (Most of the

S Other Variables included:

          Number of Rounds          Major Event?
          World Golf Championship   Course Length
          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
                                  Tiger Woods        -12

Major Tournaments                 Exempt             4
                                  Non-Exempt         6
                                  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

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?

All Regular & Major Tournaments

S   Reported results using only players that made the cut

S   Does the Superstar effect lead to worse overall performance?

       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?


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?

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?

    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?

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?

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

Risky Strategies.
S   Do golfers employ riskier strategies when they face the superstar relative to
    their play in more “winnable” tournaments?


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.

To top