This paper examines behavior in a tournament in which we vary
the tournament prize structure and the available information about
participants' skill at the task of solving mazes. The number of solved
mazes is lowest when payments are independent of performance;
higher when a single, large prize is given; and highest when multiple,
differentiated prizes are given. This result is strongest when
we inform participants about the number of mazes they and others
solved in a pre-tournament round. Some participants reported that
they solved more mazes than they actually solved, and this misreporting
also peaked with multiple differentiated prizes. (JEL D82)
Freeman, Richard B., and Alexander M. Gelber.
"Prize Structure and Information in Tournaments: Experimental Evidence."
American Economic Journal: Applied Economics,
Asymmetric and Private Information