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The Impact of Losing in a Competition on the Willingness to Seek Further Challenges

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  • Thomas Buser

Abstract

How do people react to setbacks and successes? I introduce a new measure of challenge-seeking to determine the effect of winning and losing in a competition on the willingness to seek further challenges. Participants in a lab experiment compete in two-person tournaments and are then informed of their score and the outcome of the competition. Conditional on the score, winning or losing is random. Participants then have to decide on a performance target for a second round: the higher the target, the higher the potential reward, but participants who do not reach the target earn nothing. I find that, conditional on first round scores, losers go for a more challenging target but perform worse, leading to lower earnings and a higher probability of failure. These findings could have important implications for our understanding of individual career paths. Early outcomes could alter the probability of success and failure in the long term.

Suggested Citation

  • Thomas Buser, 2014. "The Impact of Losing in a Competition on the Willingness to Seek Further Challenges," CESifo Working Paper Series 4904, CESifo.
    • Handle: RePEc:ces:ceswps:_4904
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    Cited by:

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    2. Bordunos, A. & Kokoulina, L. & Ermolaeva, L., 2015. "Role of enterprise gamified system in fostering innovation capacity: A field experiment," Working Papers 6420, Graduate School of Management, St. Petersburg State University.
    3. Thomas Buser & Anna Dreber, 2016. "The Flipside of Comparative Payment Schemes," Management Science, INFORMS, vol. 62(9), pages 2626-2638, September.
    4. Carpenter, Jeffrey & Frank, Rachel & Huet-Vaughn, Emiliano, 2018. "Gender differences in interpersonal and intrapersonal competitive behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 170-176.

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    More about this item

    Keywords

    competition; challenge seeking; career decisions; laboratory experiment; gender;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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