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Anticipatory effects of competition on confidence and risk preference

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  • Cheung, Stephen L.
  • Nadan, Vindesh

Abstract

We study anticipatory changes in confidence and risk preference aroused by the prospect of future competition. Participants in our treatment group are told they will later participate in a tournament, while those in the control group are told they will work for a piece rate. Beliefs over relative ability and risk attitudes are measured prior to this prospective task. We find no anticipatory effect on confidence in relative ability, but a significant effect on risk preference. Specifically, the treatment increases risk aversion in males, but not in females, such that the conventional gender difference in risk preference is neutralized.

Suggested Citation

  • Cheung, Stephen L. & Nadan, Vindesh, 2025. "Anticipatory effects of competition on confidence and risk preference," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 116(C).
    • Handle: RePEc:eee:soceco:v:116:y:2025:i:c:s2214804325000345
    DOI: 10.1016/j.socec.2025.102367
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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