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Ever tried. Ever failed. No matter? On the demotivational effect of losing in repeated competitions

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  • Haenni, Simon

Abstract

Many important life goals require repeated confrontation with competitors. Losing in such competitions may discourage individuals and make them postpone further competitions, thereby harming future prospects. I use data on 44,799 amateur tennis players, who are randomly paired in repeated competitions, to study the causal effect of losing on the time to the next tournament participation. Results show that individuals wait on average 10% longer to enroll again after losing. Furthermore, losing against relatively weaker opponents leads to a discontinuously larger effect than losing against relatively stronger opponents, indicating that individuals do not rationally update beliefs about winning probabilities but instead use their ranking as reference point when evaluating defeats.

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  • Haenni, Simon, 2019. "Ever tried. Ever failed. No matter? On the demotivational effect of losing in repeated competitions," Games and Economic Behavior, Elsevier, vol. 115(C), pages 346-362.
    • Handle: RePEc:eee:gamebe:v:115:y:2019:i:c:p:346-362
    DOI: 10.1016/j.geb.2019.03.012
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    3. Hermes, Henning & Huschens, Martin & Rothlauf, Franz & Schunk, Daniel, 2021. "Motivating low-achievers—Relative performance feedback in primary schools," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 45-59.

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    More about this item

    Keywords

    Competition; Natural experiment; Reference points;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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