Edited by Eva Marikova Leeds and Michael A. Leeds
Chapter 15: Do men and women respond differently to economic contests? The case of men’s and ladies’ figure skating
A consensus has developed in the economics literature that economic contests can elicit efficient levels of effort from the participants. This occurs in both the corporate world (for example, Bognanno, 2001) and the realm of sports. Economic contests base rewards on a participant’s rank rather than marginal product. As a result, small improvements in productivity bring discrete changes in rewards if they change a participant’s rank, while large improvements bring no change in reward if the participant’s rank is unchanged. Because of the detailed data on performance and compensation that exist for professional athletes, sports provide a particularly appropriate setting to analyze the incentive effects of economic contests, which are also known as rank order tournaments (ROTs). A broad literature now applies ROT theory to a variety of sports. At first, almost all applications of ROT theory to sports– like the sports economics literature in general – pertained solely to men’s sports. Increasingly, however, sports data are used to test the hypothesis that women and girls are more hesitant to join a rank-order event and that they perform worse in competitive environments than men and boys. Numerous papers using experimental data have supported this hypothesis. If these experimental findings can be confirmed using ‘real-world’ data, then reward structures based on economic contests could place women at a distinct disadvantage to men in the labor market.
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