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Risk Taking and Performance in Multistage Tournaments: Evidence from Weightlifting Competitions

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Author Info
Christos Genakos
Mario Pagliero

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Abstract

We analyze the impact of interim ranking on the risk taking and performance behaviour ofprofessional athletes participating in international weightlifting competitions. Weightliftingcompetitions are multistage tournaments with the unique characteristic that the athletes mustannounce in advance the amount they intend to lift at each stage, thus allowing quantification of theriskiness of their choices. We present two key findings. First, risk taking exhibits an inverted-Urelationship with rank: risk taking increases up to rank six, but athletes then revert to safer strategiestowards the bottom of the ranking. Second, athletes systematically underperform when ranked closerto the top, despite higher incentives to perform well. An athlete is more than 30 percent less likely tolift the announced weight when ranked first than tenth. Athletes also underperform in relatively moreprestigious competitions, when the competition is more intense, and when the potential gain from asuccessful lift is higher. Taken together, these findings suggest that athletes may systematically"choke under pressure".

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0928.

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Date of creation: May 2009
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Handle: RePEc:cep:cepdps:dp0928

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Related research
Keywords: Choking under pressure; incentives; performance; risk taking; tournaments;

Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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  1. Dohmen, Thomas J., 2008. "Do professionals choke under pressure?," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 636-653, March. [Downloadable!] (restricted)
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  2. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December. [Downloadable!] (restricted)
  3. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2007. "Incentives for Managers and Inequality Among Workers: Evidence From a Firm-Level Experiment," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 729-773, 05. [Downloadable!] (restricted)
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  4. Chevalier, Judith & Ellison, Glenn, 1997. "Risk Taking by Mutual Funds as a Response to Incentives," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1167-1200, December.
    Other versions:
  5. Pascal Courty & Gerald Marschke, 2004. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 23-56, January. [Downloadable!]
    Other versions:
  6. Knoeber, Charles R & Thurman, Walter N, 1994. "Testing the Theory of Tournaments: An Empirical Analysis of Broiler Production," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 155-79, April. [Downloadable!] (restricted)
  7. Uri Gneezy & Aldo Rustichini, . "Gender and competition at a young age," Framed Field Experiments 0027, The Field Experiments Website. [Downloadable!]
  8. Robert Slonim & Alvin E. Roth, 1998. "Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic," Econometrica, Econometric Society, vol. 66(3), pages 569-596, May.
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  10. Nieken, Petra & Sliwka, Dirk, 2008. "Risk-Taking Tournaments: Theory and Experimental Evidence," IZA Discussion Papers 3400, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Uri Gneezy & Aldo Rustichini, 2004. "Gender and Competition at a Young Age," American Economic Review, American Economic Association, vol. 94(2), pages 377-381, May. [Downloadable!]
  12. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March. [Downloadable!] (restricted)
  13. Brown, Keith C & Harlow, W V & Starks, Laura T, 1996. " Of Tournaments and Temptations: An Analysis of Managerial Incentives in the Mutual Fund Industry," Journal of Finance, American Finance Association, vol. 51(1), pages 85-110, March. [Downloadable!] (restricted)
  14. Ehrenberg, Ronald G & Bognanno, Michael L, 1990. "Do Tournaments Have Incentive Effects?," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1307-24, December. [Downloadable!] (restricted)
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