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Observing your competitor – The role of effort information in two-stage tournaments

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  • Ludwig, Sandra
  • Lünser, Gabriele K.

Abstract

We consider two-stage tournaments with different information structures: Either competitors observe each others’ first-stage effort before entering the second stage or not. In laboratory experiments, we observe that subjects adjust their effort to the effort information (if available): While subjects who lead continue to exert the higher effort, they tend to lower their effort relative to the first stage, whereas those who lag increase it. Moreover, the larger the first-stage effort gap, the lower are second-stage efforts. These observations are consistent with our predictions for status-concerned subjects who care about their relative (interim) standing and the size of the effort gap.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 33 (2012)
Issue (Month): 1 ()
Pages: 166-182

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Handle: RePEc:eee:joepsy:v:33:y:2012:i:1:p:166-182

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Web page: http://www.elsevier.com/locate/joep

Related research

Keywords: Tournament design; Status; Feedback; Incentives; Experiment;

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References

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Citations

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Cited by:
  1. Eisenkopf, Gerald & Teyssier, Sabrina, 2013. "Envy and loss aversion in tournaments," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 240-255.
  2. Josse Delfgaauw & Robert Dur & Arjan Non & Willem Verbeke, 2010. "Dynamic Incentive Effects of Relative Performance Pay: A Field Experiment," Tinbergen Institute Discussion Papers 10-124/1, Tinbergen Institute, revised 27 Sep 2011.
  3. Mago, Shakun & Samak, Anya & Sheremeta, Roman, 2013. "Facing Your Opponents: Social Identification and Information Feedback in Contests," MPRA Paper 47029, University Library of Munich, Germany.

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