Graduation Year

Spring 2012

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Janet K. Smith

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Terms of Use for work posted in Scholarship@Claremont.

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© 2012 Andrew T. Duckworth

Abstract

Nonlinear prize money structures are used in professional golf tournaments in order to induce competitors to exert a maximum level of effort. While there has been a growing amount of literature using professional golf data to test tournament theory’s basic prediction that increasing prize levels results in an increase in player effort level, no consistent narrative has emerged. Furthermore, in 2007, the PGA Tour introduced the FedExCup system, which significantly altered the ranking and prize money structure of professional golf. This paper incorporates data from the 2011 PGA tour season to analyze whether or not the introduction of the FedExCup has led to increased effort level on the part of competitors, as predicted by tournament theory. The results negate the predictions of tournament theory and suggest that an increase in tournament prize money is associated with a corresponding increase in player scores over the course of the tournament. However, these findings can be explained by examining the dramatic increase in PGA Tour prize money levels over the last two and a half decades, which has induced golfers to decrease their average level of effort.

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