Nonmonetary Rewards in Contests

Speaker: Prof Dmitry Ryvkin

Affiliation: RMIT University

Location: Room 215, Chamberlain Building (#35), St Lucia Campus

Zoom: https://uqz.zoom.us/j/82603079317

Abstract: We study how the number of nonmonetary status rewards---publicly awarded trophies---affects effort provision. In a one-shot real-effort experiment, participants in eight-person sessions have 40 minutes to perform an uninteresting task for a flat wage. Attractive outside options to spend time are provided. Participants are ranked by performance, and top k performers are awarded a cheap plastic trophy. Treatments differ by k=0,1,3,4,5,7. Theory based on status concerns predicts a hump-shaped dependence of effort on k. We find that the presence of trophies (k>0) significantly raises effort as compared to the k=0 baseline, and the hump-shaped pattern in k is confirmed, with a peak at k=3. Structural estimation based on equilibrium bidding functions, with player types determined by a combination of ability, status seeking and competitiveness, reveals competitiveness as the key factor. We also analyze subjects' open-ended responses to a survey question about motivation behind their effort choices. Two human coders and ChatGPT independently coded the responses following the same rubric and set of instructions. There is high degree of agreement between human coders and the LLM on factual questions, but the LLM struggles to match human coders on subjective interpretations. For k=0, most subjects are categorized as "transactional," while for k>0 the leading category is "competitive." Subjects reporting competitive motivation exert effort about three times higher than those reporting transactional motivation.