Unfortunately, as Lazear and Rosen were well aware, tournaments also have unwelcome features. They discourage cooperation: One study of Australian companies discovered that workers facing tournament-style pay structures were less likely to call in sick, but also less likely to share tools with each other.
Still, tournament theory explains a lot about office politics and the inequities of working life. The CEO's pay, it turns out, is not designed to motivate him but to motivate potential successors. Think of it as a sort of "lifetime achievement" award for somebody whose productive contribution is long over.
Since we did not have twins, I will not be able to put tournament theory into practice at home. Perhaps the idea is a little potty anyway.
TODAY IN SLATE
The Right Target
Why Obama’s airstrikes against ISIS may be more effective than people expect.
Why Is This Mother in Prison for Helping Her Daughter Get an Abortion?
Divestment Is Fine but Mostly Symbolic. There’s a Better Way for Universities to Fight Climate Change.
I Stand With Emma Watson on Women’s Rights
Even though I know I’m going to get flak for it.
It Is Very Stupid to Compare Hope Solo to Ray Rice
In Defense of HR
Startups and small businesses shouldn’t skip over a human resources department.