Leading-effect vs. Risk-taking in Dynamic Tournaments: Evidence from a Real-life Randomized Experiment
AbstractTwo 'order effects' may emerge in dynamic tournaments with information feedback. First, participants adjust effort across stages, which could advantage the leading participant who faces a larger 'effective prize' after an initial victory (leading-effect). Second, participants lagging behind may increase risk at the final stage as they have 'nothing to lose' (risk-taking). We use a randomized natural experiment in professional two-game soccer tournaments where the treatment (order of a stage-specific advantage) and team characteristics, e.g. ability, are independent. We develop an identification strategy to test for leading-effects controlling for risk-taking. We find no evidence of leading-effects and negligible risk-taking effects.
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 15452.
Date of creation: 17 Jun 2013
Date of revision:
Tournaments; order effects; leading-effect; risk-taking; randomized natural experiments;
Find related papers by JEL classification:
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-30 (All new papers)
- NEP-CBE-2013-06-30 (Cognitive & Behavioural Economics)
- NEP-EXP-2013-06-30 (Experimental Economics)
- NEP-HRM-2013-06-30 (Human Capital & Human Resource Management)
- NEP-UPT-2013-06-30 (Utility Models & Prospect Theory)
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