What does the Tournament Theory suggest about people and rewards?

The Tournament Theory posits that individuals are motivated by the prospect of receiving highly valuable rewards, even if the likelihood of actually obtaining those rewards is relatively low. This theory is often applied in contexts such as competitive job environments or performance-based systems where the rewards can include promotions, bonuses, or other significant benefits tied to achievement levels.

In scenarios where individuals compete for these high-stakes rewards, their motivation can actually increase as they strive for the chance to achieve something substantial, showcasing the allure of potential high returns over guaranteed, but smaller, rewards. This understanding can inform how organizations structure their incentive and compensation programs, emphasizing the role of competition and potential outcomes in motivating employee performance.

The other concepts, such as indifference to reward value, preference for smaller guaranteed rewards, or an equal distribution of rewards, do not align with the primary principles of Tournament Theory and do not capture the essence of competitive motivation as effectively as the selected answer does.