It is important to highlight that our reward and punish
prize structure differs from our reward prize structure in
two ways. First, the reward and punish prize structure
includes a penalty element that is lacking from the reward
prize structure. Second, the reward and punish prize structure
is a three-level prize structure that sorts participants
as winners, nonwinners, and losers, whereas the reward
prize structure is a two-level prize structure that sorts people
as winners and nonwinners. The purpose of our experiment
design is not to distinguish the incremental effect
each of these two differences has on tournament performance
but to compare the effect of a reward and punish
prize structure to that of a reward prize structure. Put differently,
we cannot comment on whether any differences
in performance across our prize structure conditions are
driven by the presence of punishment, the addition of a
third-tier to the pay structure, or both.