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Abstract

Current economic theory dictates that effort exertion in tournaments is highest when contestants are homogeneous. This article tests this hypothesis for male tennis players in the final rounds of the four Grand Slam tournaments. The study adds to existing literature by providing several new ways to define heterogeneity of tennis players and also examines whether diminishing marginal utility of income exists for these contestants. Using OLS regression I find that in general heterogeneity of contestants does not have a significant effect on their performance, but it does have a significant negative incentive effect on the favorite player’s effort exertion more often than on the underdog’s performance. Additionally, prize money is not found to be a significant incentive for players to play harder in the final rounds of Grand Slam tournaments.

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