Department of Economics and Business Economics

Incentive Pay and Decision Quality: Evidence from NCAA Football Coaches

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Using play-by-play American football data and panel data on head coach remuneration, we test whether a head coach’s incentive pay affects the quality of their decisions. We proceed by first estimating an ‘optimal strategy’ for first-down offensive plays, then investigate whether the gap between actual and optimal choices is affected by incentive pay. In contrast to merely looking at the outcome of an agent’s choice, our approach considers the decision environment and the resources available. We find a small, but significant, negative effect of incentive pay on decision quality. Critically, this effect is not found when looking at raw outcome measures.

Original languageEnglish
JournalApplied Economics
Volume54
Issue30
Pages (from-to)3505-3520
Number of pages16
ISSN0003-6846
DOIs
Publication statusPublished - 2022

    Research areas

  • Incentive pay, decision quality, panel data, semiparametric estimation, sports

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