This paper studies the performance of promotion tournaments with heterogeneous participants in two dimensions: incentive provision and selection. Our theoretical analysis reveals a trade-off for the tournament designer between the two goals: While total effort is maximized if less heterogeneous...

Modeling the incentive effects of competitions among employees for promotions or financial rewards, economists have largely ignored the effects of competition on effort provision once the competition is finished. In a laboratory experiment, we examine how competition outcomes affect the...