An empirical test of tournament theory: the senior PGA tour
Article Abstract:
Using data from the Senior PGA Tours we analyze the incentive effects of rank order tournaments. Previous studies using data from the PGA Tour reached conflicting conclusions. To resolve the issue, the Senior PGA Tour was chosen for its unique format where players are not cut from the tournament before completion, eliminating any survival bias. The findings support the hypothesis that the level of prizes in Senior PGA tournaments influences players' performance, indicating that tournaments can be used to motivate performance.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 2000
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Professional golf: labor or leisure
Article Abstract:
Although most labor and microeconomic textbooks contain a theoretical discussion of the backward-bending labor supply curve, scant empirical evidence of this phenomenon exists. In this paper we investigate the behavior of PGA golf professionals as they make labor-leisure choices for performing on the PGA Tour. Using tournament theory to model this labor market and data from tournament performances over three separate years, we find significant evidence that higher paid PGA Tour players do indeed operate in the backward-bending region of their labor supply curves.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 2000
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Risk taking in tournaments
Article Abstract:
Tournament theory provides important insights into organizational reward systems. It examines the incentive properties of reward systems based on rank-order rather than absolute individual performance. Tournament theory may explain the pattern of managerial pay. It may also explain risk-taking behavior by mutual fund managers. We use data from the PGA tour to examine the pattern of risk-taking by professional golfers in an explicit tournament. The PGA tour provides a natural laboratory where such behavior can be studied. Our evidence shows that behavior by players in golf tournaments is consistent with the predictions of tournament theory.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 2000
User Contributions:
Comment about this article or add new information about this topic:
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