The incentive effects of appointment tournaments in German higher education

In 2001, the German system of higher education went through a set of reforms that were – among others – intended to raise the incentives for university professors. Empirically, however, even before the reform, publication records of university professors in Germany showed high output levels over a long period of academic careers. In our paper we present one possibility of rationalizing the observed behaviour by modelling the incentive effects of appointment tournaments in German higher education. We recur on the seminal work by Lazear and Rosen (1981) and extend their basic model by (a) allowing for intrinsic motivation applying J-curved effort cost functions and (b) accounting for contestant heterogeneity concerning two basic types of contestants (junior scientists and professors). Following our theoretical analysis, we analyze the effects of selected reform elements on the incentives arising from the appointment system.