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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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; 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)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Jose Apesteguia & Ignacio Palacios-Huerta, 2010.
"Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment,"
American Economic Review,
American Economic Association, vol. 100(5), pages 2548-64, December.
- José Apesteguia & Ignacio Palacios-Huerta, 2008. "Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment," Working Papers 361, Barcelona Graduate School of Economics.
- Jose Apesteguia & Ignacio Palacios-Huerta, 2008. "Psychological pressure in competitive environments: Evidence from a randomized natural experiment," Economics Working Papers 1116, Department of Economics and Business, Universitat Pompeu Fabra.
- Hvide, H.K., 1999.
"Tournament Rewards and Risk Taking,"
32-99, Tel Aviv.
- Hans K. Hvide, 2000. "Tournament Rewards and Risk Taking," Econometric Society World Congress 2000 Contributed Papers 0163, Econometric Society.
- Edward P. Lazear, 2000. "The Power of Incentives," American Economic Review, American Economic Association, vol. 90(2), pages 410-414, May.
- Moul, Charles C. & Nye, John V.C., 2009. "Did the Soviets collude? A statistical analysis of championship chess 1940-1978," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 10-21, May.
- Klumpp, Tilman & Polborn, Mattias K., 2006. "Primaries and the New Hampshire Effect," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1073-1114, August.
- Matthias Kräkel & Dirk Sliwka, 2001.
"Risk Taking in Asymmetric Tournaments,"
Bonn Econ Discussion Papers
bgse33_2001, University of Bonn, Germany.
- Christos Genakos & Mario Pagliero, 2012.
"Interim Rank, Risk Taking, and Performance in Dynamic Tournaments,"
Journal of Political Economy,
University of Chicago Press, vol. 120(4), pages 782 - 813.
- Christos Genakos & Mario Pagliero, 2011. "Interim Rank, Risk Taking and Performance in Dynamic Tournaments," Carlo Alberto Notebooks 196, Collegio Carlo Alberto.
- Konrad, Kai A. & Kovenock, Dan, 2006.
Purdue University Economics Working Papers
1187, Purdue University, Department of Economics.
- Konrad, Kai A & Kovenock, Dan, 2006. "Multi-Battle Contests," CEPR Discussion Papers 5645, C.E.P.R. Discussion Papers.
- Konrad, Kai A. & Kovenock, Dan, 2006. "Multi-battle contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 122, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Chevalier, J. & Ellison, G., 1996.
"Risk Taking by Mutual Funds as a Response to Incentives,"
96-3, Massachusetts Institute of Technology (MIT), Department of Economics.
- 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.
- Judith A. Chevalier & Glenn D. Ellison, 1995. "Risk Taking by Mutual Funds as a Response to Incentives," NBER Working Papers 5234, National Bureau of Economic Research, Inc.
- Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
- P.-A. Chiappori, 2002. "Testing Mixed-Strategy Equilibria When Players Are Heterogeneous: The Case of Penalty Kicks in Soccer," American Economic Review, American Economic Association, vol. 92(4), pages 1138-1151, September.
- Edward P. Lazear & Sherwin Rosen, 1979.
"Rank-Order Tournaments as Optimum Labor Contracts,"
NBER Working Papers
0401, National Bureau of Economic Research, Inc.
- Martin G. Kocher & Marc V. Lenz & Matthias Sutter, 2012. "Psychological Pressure in Competitive Environments: New Evidence from Randomized Natural Experiments," Management Science, INFORMS, vol. 58(8), pages 1585-1591, August.
- Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
- Christian Grund & Oliver Gurtler, 2005.
"An empirical study on risk-taking in tournaments,"
Applied Economics Letters,
Taylor and Francis Journals, vol. 12(8), pages 457-461.
- Nieken, Petra & Sliwka, Dirk, 2010.
"Risk-taking tournaments - Theory and experimental evidence,"
Journal of Economic Psychology,
Elsevier, vol. 31(3), pages 254-268, June.
- Nieken, Petra & Sliwka, Dirk, 2008. "Risk-Taking Tournaments: Theory and Experimental Evidence," IZA Discussion Papers 3400, Institute for the Study of Labor (IZA).
- Thomas J. Dohmen, 2010.
"Do Professionals Choke Under Pressure?,"
- Dohmen, Thomas, 2005. "Do Professionals Choke Under Pressure?," IZA Discussion Papers 1905, Institute for the Study of Labor (IZA).
- Dohmen, Thomas J., 2008. "Do professionals choke under pressure?," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18491, Maastricht University.
- Hvide, Hans K. & Kristiansen, Eirik G., 2003.
"Risk taking in selection contests,"
Games and Economic Behavior,
Elsevier, vol. 42(1), pages 172-179, January.
- Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 921-55, November.
- David A. Malueg & Andrew J. Yates, 2010. "Testing Contest Theory: Evidence from Best-of-Three Tennis Matches," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 689-692, August.
- González-Díaz, Julio & Gossner, Olivier & Rogers, Brian W., 2012. "Performing best when it matters most: Evidence from professional tennis," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 767-781.
- Devin G. Pope & Maurice E. Schweitzer, 2011. "Is Tiger Woods Loss Averse? Persistent Bias in the Face of Experience, Competition, and High Stakes," American Economic Review, American Economic Association, vol. 101(1), pages 129-57, February.
- Christopher Ferrall & Anthony A. Smith, 1999.
"A Sequential Game Model Of Sports Championship Series: Theory And Estimation,"
The Review of Economics and Statistics,
MIT Press, vol. 81(4), pages 704-719, November.
- Christopher Ferrall & Anthony A. Smith, Jr., . "A Sequential Game Model of Sports Championship Series: Theory and Estimation," GSIA Working Papers 1997-38, Carnegie Mellon University, Tepper School of Business.
- Taylor, Jonathan, 2003. "Risk-taking behavior in mutual fund tournaments," Journal of Economic Behavior & Organization, Elsevier, vol. 50(3), pages 373-383, March.
- Beck A. Taylor & Justin G. Trogdon, 2002. "Losing to Win: Tournament Incentives in the National Basketball Association," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 23-41, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandra Frank).
If references are entirely missing, you can add them using this form.