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Effect of social information on competition choice

Author

Listed:
  • Banerjee, Ritwik
  • Gangadharan, Lata
  • Kumar, Anand
  • Murali, Srinivasan

Abstract

We examine how social information about competition choices influences individuals’ willingness to compete. Participants perform a real-effort task under both piece-rate and tournament incentives, and subsequently make competition choices in two rounds. Between rounds, we exogenously vary the information provided about others’ choices across three treatments. We find that social information about the proportion of participants who chose to compete in the first round significantly affects the willingness to compete in the second round. This effect is not driven by the salience of the incentive schemes. Observing a lower rate of competition among peers increases an individual’s propensity to enter the tournament. This evidence is consistent with predictions from a rational model of Bayesian learning, in which individuals strategically choose to compete based on their treatment-induced belief about the average ability of other participants.

Suggested Citation

  • Banerjee, Ritwik & Gangadharan, Lata & Kumar, Anand & Murali, Srinivasan, 2026. "Effect of social information on competition choice," Journal of Economic Behavior & Organization, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:jeborg:v:248:y:2026:i:c:s0167268126001770
    DOI: 10.1016/j.jebo.2026.107591
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    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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