2019 Fiscal Year Annual Research Report

How Does Goal Setting Incentivize Workers in the Tournament Reward Scheme with Sabotage? Theory and Evidence

Research Project

Project/Area Number	18K12862
Research Institution	International University of Japan
Principal Investigator	Tang Cheng・Tao 国際大学, 国際関係学研究科, 講師(移行) (00799330)
Project Period (FY)	2018-04-01 – 2020-03-31
Keywords	Tourname / Sabotage / Goal setting
Outline of Annual Research Achievements	This paper studies the effects of goal setting in the tournament reward scheme where agents have 2-dimension activities: productive effort and sabotage activities. Our theoretical model predicts goal setting in tournament can play a positive role: increase productive effort and decrease sabotage. Consistent with theory, results from our laboratory experiment confirm the positive effects of goal setting in tournament. However, contrary to the theory, we find effects of goal setting diminishes as financial incentives increases. Financial incentives become dysfunctional when high goals are implemented. Overall, high goals increase performances more than higher financial incentives. The working paper is completed early this year and is now circulated (see URL of the working paper file in remarks column). Also, to complement the current work, we conduct a follow-up survey during early 2020 in Australia by Pureprofile.
Remarks	The working paper version is stored in dropbox website and open for the public.