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Non-technical summary

In many situations, applicants compete for a limited number of positions, and selection
is based on perceived skill or talent, for example in hiring and promotion procedures or
in nominations of election candidates by political parties.

Our paper provides a theory of agents’ effort incentives in such situations and tests the
predictions of this theory versus alternative theories by means of a quasi-experiment in
professional soccer. Our theory introduces signal jamming as in career concerns models in
rank-order tournaments, allowing for asymmetries between agents. We show that incen-
tives are strongest in close contests, i.e., when several agents have similar ex ante winning
probabilities. Moreover, the accuracy of the nomination committee’s information about a
candidate’s ability at the beginning of the selection process may also affect her incentives.
As we show, the predicted relation between a candidate’s optimal effort and the precision
of the information the decision-maker has about her is non-monotonic.

We test these predictions using a panel data set on the German Soccer League in the
seasons 2006/07 and 2007/08. A subset of players belong to nations that qualified for the
Euro Cup in summer 2008, the most prestigious international soccer Cup alongside the
World Cup, and thus participated in the nomination contest.

We find a large positive effect of nomination contest participation on several output mea-
sures, for example the number of shots on the goal, for players with intermediate chances
of being nominated. For players whose nominations chances are very high, however, the
effect of contest participation is negative. That means that players whose uncertainty over
their (non-)nomination is highest will exert the most effort in order to positively influence
the decision of being nominated. Players who are certain of (not) being nominated do
not have any incentive to exert extra effort since it will have no impact on the decision.
Much rather do these players reduce effort in club games in order to avoid injuries that
may jeopardize their Euro Cup participation.

Finally, by showing that younger players react more strongly to their countries’ Euro Cup
qualifications, we provide evidence consistent with career concerns. That is, participating
in a Euro Cup has much higher relevance to the career prospects of a younger player than
to those of a players who is at the very end of his career.

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