This paper reports the results of an economic experiment investigating human subjects' preferences for two types of contracts tournaments and fixed performance standard contracts. Willingness to pay data was elicited through an auction and results suggest that subjects prefer fixed performance...

Experimental economics is used to compare tournaments (T) and fixed performance contracts (F) when agents have heterogeneous costs. Our primary findings were: (1) There is no statistical difference in average pooled effort (effort by high ability and low ability subjects are pooled together to...