Time on Camera: An Alternative Explanation of NASCAR Tournaments
ABSTRACT:
NASCAR’s reward structure for rank order tournaments has been considered the exception to the rule in tournament theory due to the linear payout structure. We suggest that the rewards for drivers are nonlinear when you take into consideration the value of sponsorship time on camera and sponsor mentions during a race on TV. Given the importance of corporate sponsorship in NASCAR, we suggest that performance in a race provides additional benefits that are not captured in traditional tournament payments.
Introduction
Often sporting contests are used as a labor market laboratory to empirically test the implications of labor economics such as tournament theory (Kahn 2000). In sports, nonlinear payment structures are found in rank order tournaments such as golf (Ehrenberg and Bognanno 1990, and Melton and Zorn 2000) and marathon running (Frick 2003). Auto racing provides an exception to the...