Question

In sporting events such as marathons, under Tournament Structure Theory, a bigger differential between the prize for 1st and 2nd place will lead to: No effect on effort Slower times More entrants Faster times

Answer 1

The tournament structure theory suggests how incentives of participants varies based on the prize money. When there is a single prize, the effort is lesser when compared to a situation when there are numerous prizes. Participants see the difference between the first and second prize and not the absolute amounts.

A huge differential between first and second prize would lead to an increase in the effort. Multiple prizes leads to more entrants and more efforts by the participants.