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“Success breeds success” or “Pride goes before a fall”?

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  • Fu, Qiang
  • Ke, Changxia
  • Tan, Fangfang

Abstract

We study the impact of progress feedback on players' performance in multi-contest team tournaments, in which team members' efforts are not directly substitutable. In particular, we employ a real-effort laboratory experiment to understand, in a best-of-three tournament, how players' strategic mindsets change when they compete on a team compared to when they compete individually. Our data corroborate the theoretical predictions for teams: Neither a lead nor a lag in the first component contest affects a team's performance in the subsequent contests. In individual tournaments, however, contrary to the theoretical prediction, we observe that leaders perform worse—but laggards perform better—after learning the outcome of the first contest. Our findings offer the first empirical evidence from a controlled laboratory of the impact of progress feedback between team and individual tournaments, and contribute new insights on team incentives.

Suggested Citation

  • Fu, Qiang & Ke, Changxia & Tan, Fangfang, 2015. "“Success breeds success” or “Pride goes before a fall”?," Games and Economic Behavior, Elsevier, vol. 94(C), pages 57-79.
  • Handle: RePEc:eee:gamebe:v:94:y:2015:i:c:p:57-79
    DOI: 10.1016/j.geb.2015.09.002
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    More about this item

    Keywords

    Multi-contest tournaments; Real effort; Feedback; Team incentive; Experiment;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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