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Category Archives: J31

For Love of the Game: A Study of Tournament Theory and Intrinsic Motivation in Dota 2

By YAO Shengjie

This paper studies the effect of intrinsic motivation on the extrinsic incentives specified by tournament structure in tournament theory in the context of e-sports. It incorporates tournament theory and motivation crowding theory in the same framework, something that past literature have hinted towards but never formally done so. It also uses an e-sports dataset, a type of dataset that few academics in the past have dealt with, but one that offers many interesting potentials. Results weakly show that crowding-in occurs in e-sports, but the effects of tournament structure on performance are inconclusive in the context of this paper. Implications of this paper lie mainly in the possibility for future academics to utilise e-sports data for research.

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Advisors: Professor Grace Kim | JEL Codes: J31, J33, J41, M51, M52, Z20

Immigrant Workers in a Changing Labor Environment: A study on how technology is reshaping immigrant earnings

By Grace Peterson

This research determines how automation affects immigrant wages in the US and how closely this impact follows the skills-biased technical change (SBTC) hypothesis. The present study addresses this question using American Community Survey (ACS) data from 2012 to 2016 and a job automation probability index to explain technological change. This research leverages OLS regressions to evaluate real wage drivers, grouping data by year, immigration status, and education level. According to the SBTC hypothesis, high skill immigrant wages should be less negatively affected by technological change than low skill immigrant wages. Univariate analysis suggests that the SBTC hypothesis is even stronger for US = immigrants than native-borns, as high skill immigrants have a lower average probability than low skill immigrants of having their jobs automated, and the difference in effect on high versus low skilled workers is larger for immigrant than native-borns. However, multivariate analysis asserts that technological change affects low skill immigrants’ wages less than high skilled individuals’ wages, which counters the SBTC hypothesis.

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Advisors: Professor Grace Kim | JEL Codes: J15, J24, J31, J61, E24

Incentives to Quit in Men’s Professional Tennis: An Empirical Test of Tournament Theory

By Will Walker

This paper studies the influence of incentives on quitting behaviors in professional men’s tennis tournaments and offers broader implications to pay structures in the labor market. Precedent literature established that prize incentives and skill heterogeneity can impact player effort exertion. Prize incentives include prize money and indirect financial rewards (ranking points). Players may also exert less effort when there is a significant difference in skill between the match favorite and the match underdog. Results warrant three important conclusions. First, prize incentives (particularly prize money) do influence a player’s likelihood of quitting. Results on skill heterogeneity are less conclusive, though being the “match favorite” could reduce the odds of quitting. Finally, match underdogs and “unseeded” players may be especially susceptible to the influence of prize incentives when considering whether to quit.

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Advisors: Peter Arcidiacono and Grace Kim | JEL Codes: J41, J31, J32, J33, M12, M51, M52

Measuring the Long-term Effects of Orphanhood

By Nicholas Thomas Gardner

This paper works towards developing the narrative of orphans whose parent or parents died from natural disaster. By taking advantage of the unanticipated nature of death from the 2004
Indonesian tsunami, orphanhood can be treated as much closer to random than similar literature using data centered on HIV/AIDS related deaths. We use a community level fixed effects model to attempt to derive a causal relationship between orphanhood and both education and log wages. Our models suggest that orphaned males aged 14 and older at baseline complete 1-2 fewer years of education than their cohorts. The adverse effects persist in the long-term, as these orphans earn 26% less than non-orphan cohorts.

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Advisors: Duncan Thomas and Kent Kimbrough | JEL Codes: I24, I25, I31, J24, J31

Obesity and its Impact on Job Quality

By Kelly Lessard

This study explores the relationship between body mass and job quality in the United States labor force using five variables to represent job quality: hourly wage, training in the past year, desire for training, expectations for success, and job satisfaction. I use the National Longitudinal Survey of Youth 1979 data from 1994 to calculate BMI and assess the job quality indicators. Like past research, I find BMI is negatively associated with wages for the obese population, most significantly for women. Women also suffer a greater body mass penalty for job training and demonstrate lower job satisfaction at a higher BMI.

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Advisor: Alison Hagy, Tracy Falba |  JEL Codes: J7, J31, J71 | Tagged: BMI, Job Quality, Labor Productivity, Obesity

Is the Blind Side Tackle Worth It?: An Analysis of the Salary Allocation of the NFL Offensive Line

By Kelly Froelich

The importance of the left tackle position in comparison to the other offensive line positions in the National Football League (NFL) has been widely debated amongst sports commentators, as the left tackle is traditionally the second highest paid player on a football team behind the quarterback; yet, this debate lacks empirical findings. This paper aims to quantify the impact of the individual offensive linemen on the chance of winning a game on a game‐by‐game basis and then compare the impact of the left tackle to the other offensive line positions. Using a conditional logistic regression and the marginal effects from that regression, the results do not dispute the NFL’s current trend in spending more on the left tackle in comparison to the other offensive line positions. The results show that optimal spending for the left tackle could extend to 15.976 percent of the salary cap. Thus, the possibility remains that the optimal spending for the left tackle can range up to fifteen percent of the
salary cap, seven percentage points above the next highest optimal offensive lineman spending.

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Advisor: Peter Arcidiacon | JEL Codes: J3, J31, J44 | Tagged: Football, Left Tackle, NFL, Offensive Line, Salary

Capturing a College Education’s Impact on Industry Wages Across Time: An Analysis of Academic Factors that Affect Earnings

By Ian Low

Studying how a college education can impact one’s wages has always been an area of interest amongst labor and education economists. While previous studies have stressed using single academic factors (i.e. college major choice, performance, or college prestige) to determine the effect on wages, there has not been a focus on predicting wages given industries and a combination of these academic factors across time. Therefore, the crux of my thesis seeks to provide a new model which incorporates college major choice, GPA, industry selection across time, college type (private or public), natural ability (standardized test scores), and several demographic variables in order to predict percent increase/decrease in wages. My results show that college major choice, academic performance, natural ability, and industry selection (together) do have a significant impact on earnings, and they are appropriate measures to predict post-graduation wages.

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Advisor: Peter Arcidiacon | JEL Codes: A2, A22, J3, J31 | Tagged: College, Industry, Wages

Incentives in Professional Tennis: Tournament Theory and Intangible Factors

By Steven Seidel

This paper analyzes the incentives of professional tennis players in a tournament setting, as a proxy for workers in a firm. Previous studies have asserted that workers exert more effort when monetary incentives are increased, and that effort is maximized when marginal pay dispersion varies directly with position in the firm. We test these two tenets of tournament theory using a new data set, and also test whether other “intangible factors,” such as firm pride or loyalty, drive labor effort incentives. To do this, we analyze the factors that incentivize tennis players to exert maximal effort in two different settings, tournaments with monetary incentives (Grand Slams) and tournaments without monetary incentives (the Davis Cup), and compare the results. We find that effort exertion increases with greater monetary incentive, and that certain intangible factors can often have an effect on player incentives.

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Advisor: Curtis Taylor, Marjorie McElroy | JEL Codes: J31, J33, L38 | Tagged: Compensation, Sports, Tournament Theory

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