Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Ludwig, Sandra / Schmitz, Hendrik

Ed. by Auriol, Emmanuelle / Barigozzi, Francesca / Brunner, Johann / Fleck, Robert / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / de Vries, Frans / Wenzel, Tobias / Zulehner, Christine

IMPACT FACTOR 2017: 0.306
5-year IMPACT FACTOR: 0.492

CiteScore 2017: 0.50

SCImago Journal Rank (SJR) 2017: 0.414
Source Normalized Impact per Paper (SNIP) 2017: 0.531

See all formats and pricing
More options …
Volume 19, Issue 1


Volume 19 (2019)

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

Sorting into Contests: Evidence from Production Contracts

Zhen Wang / Tomislav Vukina
Published Online: 2019-01-05 | DOI: https://doi.org/10.1515/bejeap-2018-0049


In this paper, we investigate sorting patterns among chicken producers who are offered a menu of contracts to choose from. We show that the sorting equilibrium reveals a positive sorting where higher ability producers self-select themselves into contracts to grow larger chickens and lower ability types self-select themselves into contracts to grow smaller birds. We also show that eliciting this type of sorting behavior is profit maximizing for the principal. In the empirical part of the paper, we first estimate growers’ abilities using a two-way fixed effects model and subsequently use these estimated abilities to estimate a random utility model of contract choice. Our empirical results are supportive of the developed theory.

Keywords: hiring; incentives; cardinal tournaments

JEL Classification: M52; J43; D86


  • Azmat G., and M. Möller. 2009. “Competition Among Contests.” The RAND Journal of Economics 40 (4): 743–68.CrossrefGoogle Scholar

  • Azmat, G., and M. Möller. 2013. “The Distribution of Talent across Contests.” Barcelona GSE Working paper Series, 600, May, 2013.Google Scholar

  • Bandiera, O., L. Guiso, A. Prat, and R. Sadun. 2015. “Matching Firms, Managers and Incentives.” Journal of Labor Economics 33 (3).Web of ScienceGoogle Scholar

  • Barro, J., and N. Beaulieu. 2003. “Selection and Improvement: Physician Responses to Financial Incentives.” NBER Working Paper Series, No. 10017, 2003.Google Scholar

  • Bull, C., A. Schotter, and K. Weigelt. 1987. “Tournaments and Piece Rates: An Experimental Study.” Journal of Political Economy 95 (1): 1–33.CrossrefGoogle Scholar

  • Cadsby, C., F. Song, and F. Tapon. 2007. “Sorting and Incentive Effects of Pay for Performance: An Experimental Investigation.” Academy of Management Journal 50: 1–41.Google Scholar

  • Cameron, A. C., and D. L. Miller. 2015. “A Practitioners Guide to Cluster-Robust Inference.” Journal of Human Resources 50 (2): 317–72.CrossrefGoogle Scholar

  • Dechenaux, E., D. Kovenock, and R. M. Sheremeta. 2015. “A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments.” Experimental Economics 18 (4): 609–69.CrossrefWeb of ScienceGoogle Scholar

  • Dohmen, T., and A. Falk. 2011. “Performance Pay and Multidimensional Sorting: Productivity, Preferences, and Gender.” American Economic Review 101 (2): 556–90.CrossrefWeb of ScienceGoogle Scholar

  • Ehrenberg, R. G., and M. L. Bognanno. 1990. “Do Tournaments Have Incentive Effects?” Journal of Political Economy 98 (6): 1307–24.CrossrefGoogle Scholar

  • Eriksson, T., and M. C. Villeval. 2008. “Performance-Pay, Sorting and Social Motivation.” Journal of Economic Behavior and Organization 68, no. 2 (November): 412–21.CrossrefWeb of ScienceGoogle Scholar

  • Freeman, R. B., and M. M. Kleiner. 2005. “The Last American Shoe Manufacturers: Decreasing Productivity and Increasing Profits in the Shift from Piece Rates to Continuous Flow Production.” Industrial Relations 44, no. 2 (March): 307–30.

  • Knoeber, C., and W. Thurman. 1994. “Testing the Theory of Tournaments: An Empirical Analysis of Broiler Production.” Journal of Labor Economics 12 (2): 155–79.CrossrefGoogle Scholar

  • Lancaster, T. 2000. “The Incidental Parameter Problem Since 1948.” Journal of Econometrics 95 (2): 391–413.CrossrefGoogle Scholar

  • Lazear, E. 2000. “Performance Pay and Productivity.” American Economic Review 90 (February): 1346–61.CrossrefGoogle Scholar

  • Leuven, E., H. Oosterbeek, J. Sonnemans, and B. van der Klaauw. 2011. “Incentives versus Sorting in Tournaments: Evidence from a Field Experiment.” Journal of Labor Economics 29 (3): 637–58.CrossrefWeb of ScienceGoogle Scholar

  • Leuven, E., H. Oosterbeek, and B. van der Klaauw. 2011. Splitting contests. Working paper, mimeo.Google Scholar

  • Levy, A., and T. Vukina. 2004. “The League Composition Effect in Tournaments with Heterogeneous Players: An Empirical Analysis of Broiler Contracts.” Journal of Labor Economics 22 (2): 353–77.CrossrefGoogle Scholar

  • Lynch, J. G., and J. S. Zax. 2000. “The Rewards to Running: Prize Structure and Performance in Professional Road Racing.” Journal of Sports Economics 1 (4): 323–40.CrossrefGoogle Scholar

  • Morgan, J., D. Sisak, and F. Várdy. 2014. “Self-selection into Contests.” Working paper, mimeo.Google Scholar

  • Nagin, D. S., J. B. Rebitzer, S. Sanders, and L. J. Taylor. 2002. “Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment.” American Economic Review 92: 850–78.CrossrefGoogle Scholar

  • Oyer, P., and S. Schaefer. 2011. “Personnel Economics: Hiring and Incentives.” Handbook of Labor Economics 4: 1769–823.Web of ScienceCrossrefGoogle Scholar

  • Tsoulouhas, T., and T. Vukina. 1999. “Integrator Contracts with Many Agents and Bankruptcy.” American Journal of Agricultural Economics 81 (1): 61–74.CrossrefGoogle Scholar

  • Van der Sluis, J., M. Van Praag, and W. Vijverberg. 2008. “Education and Entrepreneurship Selection and Performance: A Review of the Empirical Literature.” Journal of Economic Surveys 22 (5): 795–841.Web of ScienceCrossrefGoogle Scholar

  • Vukina, T., and X. Zheng. 2011. “Homogenous and Heterogenous Contestants in Piece Rate Tournaments: Theory and Empirical Analysis.” Journal of Business and Economic Statistics 29, no. 4 (December): 506–17.CrossrefWeb of ScienceGoogle Scholar

  • Wooldridge, J. Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: The MIT Press, 2002.Google Scholar

About the article

Published Online: 2019-01-05

Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 19, Issue 1, 20180049, ISSN (Online) 1935-1682, DOI: https://doi.org/10.1515/bejeap-2018-0049.

Export Citation

© 2019 Walter de Gruyter GmbH, Berlin/Boston.Get Permission

Comments (0)

Please log in or register to comment.
Log in