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The Impact of Losing in a Competition on the Willingness to Seek Further Challenges

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  • Thomas Buser

Abstract

How do people react to setbacks and successes? I introduce a new measure of challenge-seeking to determine the effect of winning and losing in a competition on the willingness to seek further challenges. Participants in a lab experiment compete in two-person tournaments and are then informed of their score and the outcome of the competition. Conditional on the score, winning or losing is random. Participants then have to decide on a performance target for a second round: the higher the target, the higher the potential reward, but participants who do not reach the target earn nothing. I find that, conditional on first round scores, losers go for a more challenging target but perform worse, leading to lower earnings and a higher probability of failure. These findings could have important implications for our understanding of individual career paths. Early outcomes could alter the probability of success and failure in the long term.

Suggested Citation

  • Thomas Buser, 2014. "The Impact of Losing in a Competition on the Willingness to Seek Further Challenges," CESifo Working Paper Series 4904, CESifo.
  • Handle: RePEc:ces:ceswps:_4904
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    Cited by:

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    2. Clément Bosquet & Pierre‐Philippe Combes & Cecilia García‐Peñalosa, 2019. "Gender and Promotions: Evidence from Academic Economists in France," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1020-1053, July.
    3. Francesco Fallucchi & Jan Niederreiter & Massimo Riccaboni, 2021. "Learning and dropout in contests: an experimental approach," Theory and Decision, Springer, vol. 90(2), pages 245-278, March.
    4. Banerjee, Ritwik & Gupta, Nabanita Datta & Villeval, Marie Claire, 2020. "Feedback spillovers across tasks, self-confidence and competitiveness," Games and Economic Behavior, Elsevier, vol. 123(C), pages 127-170.
    5. Thomas Buser, 2016. "How does the Gender Difference in Willingness to Compete evolve with Experience?," Tinbergen Institute Discussion Papers 16-017/I, Tinbergen Institute.
    6. Jung, Seeun & Vranceanu, Radu, 2017. "Experimental estimates of men's and women's willingness to compete: Does the gender of the partner matter?," ESSEC Working Papers WP1701, ESSEC Research Center, ESSEC Business School.
    7. Christopher Roth & Sonja Settele & Johannes Wohlfart, 2020. "Risk Exposure and Acquisition of Macroeconomic Information," CESifo Working Paper Series 8634, CESifo.
    8. Manar Alnamlah & Christina Gravert, 2020. "She Could Not Agree More: The Role of Failure Attribution in Shaping the Gender Gap in Competition Persistence," CEBI working paper series 20-25, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    9. Adiel Moyal & Ilana Ritov, 2020. "The effect of contest participation and contest outcome on subsequent prosocial behavior," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-16, November.
    10. Amanda Goodall & Margit Osterloh & Mandy Fong, 2020. "Women Shy Away From Competition – How To Overcome It," CREMA Working Paper Series 2020-21, Center for Research in Economics, Management and the Arts (CREMA).
    11. Bordunos, A. & Kokoulina, L. & Ermolaeva, L., 2015. "Role of enterprise gamified system in fostering innovation capacity: A field experiment," Working Papers 6420, Graduate School of Management, St. Petersburg State University.
    12. Lea Cassar & Arnd H. Klein, 2019. "A Matter of Perspective: How Failure Shapes Distributive Preferences," Management Science, INFORMS, vol. 65(11), pages 5050-5064, November.
    13. Dalton, P.S. & Gonzalez Jimenez, V.H. & Noussair, Charles, 2016. "Self-Chosen Goals : Incentives and Gender Differences (revision of 2015-021)," Discussion Paper 2016-036, Tilburg University, Center for Economic Research.
    14. John, June Park, 2017. "Gender differences and the effect of facing harder competition," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 201-222.
    15. Ranehill, Eva & Weber, Roberto A., 2017. "Do Gender Preference Gaps Impact Policy Outcomes?," Working Papers in Economics 713, University of Gothenburg, Department of Economics.
    16. Xiqian Cai & Yi Lu & Jessica Pan & Songfa Zhong, 2019. "Gender Gap under Pressure: Evidence from China's National College Entrance Examination," The Review of Economics and Statistics, MIT Press, vol. 101(2), pages 249-263, May.
    17. Thomas Buser & Huaiping Yuan, 2019. "Do Women Give Up Competing More Easily? Evidence from the Lab and the Dutch Math Olympiad," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 225-252, July.
    18. Baumann, Florian & Benndorf, Volker & Friese, Maria, 2019. "Loss-induced emotions and criminal behavior: An experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 134-145.
    19. Maria De Paola & Vincenzo Scoppa, 2015. "Gender Differences In Reaction To Psychological Pressure: Evidence From Tennis Players," Working Papers 201506, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    20. Czibor, Eszter & Claussen, Jörg & van Praag, Mirjam, 2019. "Women in a men’s world: Risk taking in an online card game community," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 62-89.
    21. Ritwik Banerjee & Nabanita Datta Gupta & Marie Claire Villeval, 2018. "Self Confidence Spillovers and Motivated Beliefs," Economics Working Papers 2018-02, Department of Economics and Business Economics, Aarhus University.
    22. Jung, SeEun & Vranceanu, Radu, 2019. "Competitive compensation and subjective well-being: The effect of culture and gender," Journal of Economic Psychology, Elsevier, vol. 70(C), pages 90-108.
    23. Bieberstein, Frauke von & Jaussi, Stefanie & Vogel, Claudia, 2020. "Challenge-seeking and the gender wage gap: A lab-in-the-field experiment with cleaning personnel," Journal of Economic Behavior & Organization, Elsevier, vol. 175(C), pages 251-277.
    24. Carpenter, Jeffrey & Frank, Rachel & Huet-Vaughn, Emiliano, 2018. "Gender differences in interpersonal and intrapersonal competitive behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 170-176.

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    More about this item

    Keywords

    competition; challenge seeking; career decisions; laboratory experiment; gender;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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