Abstract

This study seeks to answer the question: how does the presence of a superstar impact the performance of competitors in a rank-order tournament where a monetary prize is at stake? The phenomenon of the “superstar effect is growing within literature, and it is the idea that a superstar’s presence causes their competitors to perform worse. This potential drawback of a rank-order tournament is crucial to understand, as it is a common competition structure in sports and, more importantly, a widely used incentive scheme in businesses aimed at increasing employee productivity. If this potential caveat shows some significance, it could diminish the use of rank-order tournaments in business, and the use of piece-rate incentives could increase as it may be perceived as a more effective strategy for increasing productivity. To test this research question, data was collected on the 2024 PGA Tour season, and the average round scores of when Scottie Scheffler, the superstar, was present were compared to when he was not. I hypothesized that Scottie Scheffler’s presence would result in average higher round scores, meaning worse performances. Using a fixed effect model, the final results showed that when Scottie Scheffler was present, round scores were nearly three shots higher on average compared to when he was not. These results provide preliminary evidence of a “superstar effect” on the PGA Tour in 2024.

Advisor

Mellizo, Philip

Department

Business Economics

Disciplines

Business

Publication Date

2025

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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