Observing your competitor – The role of effort information in two-stage tournaments
AbstractWe 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 InfoArticle provided by Elsevier in its journal Journal of Economic Psychology.
Volume (Year): 33 (2012)
Issue (Month): 1 ()
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Tournament design; Status; Feedback; Incentives; Experiment;
Find related papers by JEL classification:
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
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