Tournament Group Identity and Performance: The Moderating Effect of Winner Proportion

Abstract

Tournament incentives are common in organizations, and how characteristics of the tournament group (e.g., tournament group identity) and the tournament incentives (e.g., winner proportion) affect tournament performance are of both practical and theoretical importance. We conduct two experiments in which participants compete for tournament rewards against others in their group. In both experiments, we manipulate the strength of participants' identity with their fellow group members and whether the tournament has a small winner proportion with a single reward or a large winner proportion with multiple rewards. In Experiment 1, we find increasing tournament group identity leads to higher other-regarding preference. We also find other-regarding preference decreases competitiveness more in a large winner proportion tournament compared to a small winner proportion tournament. In Experiment 2, we find increasing tournament group identity decreases performance in a real-effort task under a large winner proportion tournament, but it has no effect on performance under a small winner proportion tournament. Together, the two experiments suggest that increasing tournament group identity increases other-regarding preference, and other-regarding preference has a larger negative impact on competitiveness and hence, tournament performance when the winner proportion is large than when it is small. Our results highlight for managers the importance of considering group identity when determining tournament winner proportions.