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References (5)
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Ronald Ehrenberg, Michael Bognanno (1988)
Do Tournaments Have Incentive Effects?Journal of Political Economy, 98
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K. Brown, W. Harlow, L. Starks (1996)
Of Tournaments and Temptations: An Analysis of Managerial Incentives in the Mutual Fund IndustryJournal of Finance, 51
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Jerry Green, Nancy Stokey (1983)
A Comparison of Tournaments and ContractsJournal of Political Economy, 91
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10.2307/2523572
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J. Orszag (1994)
A new look at incentive effects and golf tournamentsEconomics Letters, 46
- Publisher
- Emerald Publishing
- Copyright
- Copyright © 2000 MCB UP Ltd. All rights reserved.
- ISSN
- 0307-4358
- DOI
- 10.1108/03074350010766792
- Publisher site
- See Article on Publisher Site
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.
Journal
Managerial Finance – Emerald Publishing
Published: Jul 1, 2000
Keywords: Accounting research; Risk; Financial incentives; Sport