of the typical American firm. Variable pay is usually touted as a way to provide incentives to managers whose interests … compensation in the form of variable pay. The selection or sorting explanation is consistent with the low elasticities of pay to …

to investigate the ex ante sorting effect of tournaments. This paper reports results from an experiment analyzing whether …-subject variance is substantially lower than when the same payment scheme is imposed. Mainly based on risk aversion, sorting is …

determining contest choice. Complete sorting exists only when the proportion of high-ability contestants is sufficiently small. As … this proportion increases, high-ability contestants shy away from competition and sorting decreases, such that, reverse … sorting becomes a possibility. We test our theoretical predictions with a large panel data set containing contest choice over …