Envy and Loss Aversion in Tournaments
AbstractIn tournaments, the large variance in effort provision is incompatible with standard economic theory. In our experiment we test theoretical predictions about the role of envy and loss aversion in tournaments. Our results confirm that envy implies higher effort while loss aversion increases the variance of effort. Moreover, we show that standard theory provides a good explanation for competitive behavior when envy and loss aversion do not play a role in the decision making process.
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Bibliographic InfoPaper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 52.
Date of creation: 2010
Date of revision:
Tournament; Envy; Loss Aversion;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-10 (All new papers)
- NEP-EXP-2010-07-10 (Experimental Economics)
- NEP-HPE-2010-07-10 (History & Philosophy of Economics)
- NEP-NEU-2010-07-10 (Neuroeconomics)
- NEP-UPT-2010-07-10 (Utility Models & Prospect Theory)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
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