An Empirical Examination of Multidimensional Effort in Tournaments

We provide explicit empirical tests of worker-incentive models in which individuals can devote costly e¤ort to increasing their own output and to decreasing their opponents’output. The predictions of incentive theory on this dimension have previously remained untested because systematic evidence of ‘sabotage’ activities by workers is, by nature, di¢ cult to obtain. In this investigation we exploit an incentive change that took place in European soccer league tournaments and various forms of sabotage activities that are systematically recorded. Moreover, we also use the fact that the same teams were simultaneously playing a di¤erent tournament in which there was no change in the reward spread between winners and losers. The evidence we uncover from this unique dataset is consistent with the predictions of the sabotage-based theory of tournaments. In particular, we …nd that the increase in the spread between winning and losing led to a signi…cant increase in both sabotage e¤ort and creative e¤ort; that this increase did not increase total production; and that the increase in sabotage was larger in stronger teams, which normally engage in less sabotage activities, while the increase in creative e¤ort was larger for weaker teams, which normally engage less in creative e¤ort. These results suggest that multidimensional effort models hold a great deal of promise for enhancing our understanding of the incentive e¤ects of these reward systems. We thank Je¤ Campbell, Judy Chevalier, Tom Hubbard, and Canice Prendergast and participants in the University of Chicago’s ELO workshop for useful comments and discussions. The second author also thanks Sam Peltzman and the George J. Stigler Center for their hospitality and …nancial support. We are grateful to Michael Suh for excellent research assitance. Emails: luis.garicano@gsb.uchicago.edu, ipalacios@brown.edu.