the dismal science

How Tiger throws off golf s incentive structure. It Takes a Village to fail to thank its female leader no matter how good she is. How Tiger throws off golf s incentive structure. Second prize is a set of steak knives. Third prize is you re fired. Reward structures like this exist in reality as well as fiction. The motivating effect of incentives like this can cut either way however. Tiger is the player of his generation. The exempt players the top money winners who qualify automatically averaged to strokes under par. Tiger averaged between and strokes under par. Another way to measure Tiger s dominance is his world golf rating. Golfers receive rating points based on their performance in tournaments earning more points for higher finishes. The first place finisher in the U. Open gets points for example while the second place finisher gets . The world golf rating is a player s average points per tournament. The purse at PGA tournaments varies between mi! llion and million. The prizes for the top finishers are large but they fall sharply as you move down the leader board. First place gets percent of the purse . million at an million major second place gets . percent third place gets . percent and fourth gets . If money motivates then the prospect of winning the top prize should bring out extreme effort in golf. But when Tiger is playing and you re not Tiger you face a depressed prize schedule. If you assume Tiger is going to win then the top prize available to you is rather than . That beats the heck out of steak knives but it s significantly less than the winner s take. Second place among players who are not Tiger gets rather than and so on. How can we be sure this is because of Tiger A few features of the findings lend them plausibility. The effect is also stronger during Tiger s hot streaks when his competitors prospects are more clearly dimmed. When Tiger is on his competitors scores were elevated by nearly ! two strokes when he entered a tournament. They can study the course. They can hit more balls on the driving range. They can arrive at the tournament a few days early and play more practice rounds. Of course there are other possible explanations for the study s finding besides effort such as distraction or intimidation. Maybe other golfers are just intimidated when Tiger is playing. Or maybe they are put off by the media attention lavished on the PGA s premier player. But Brown s study suggests you might want to consider its effect on your other workers performance. Steak knives might not cut it as second prize. Field Maloney examined why golf beat tennis as America s favorite country club sport. Austin Goolsbee discovered that unique incentive structures made the buses run on time in Chile.

Source: http://www.slate.com/id/2182671/nav/ais/


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