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Competition and Subsequent Risk-Taking Behaviour: Heterogeneity across Gender and Outcomes

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  • Filippin, Antonio

    (University of Milan)

  • Gioia, Francesca

    (University of Milan)

Abstract

This paper studies if competition affects subsequent risk-taking behaviour by means of a laboratory experiment that manipulates the degree of competitiveness of the environment under equivalent monetary incentives. We find that competition increases risk aversion, especially for males, but not in a significant manner. When conditioning on the outcome, we find that males become significantly more risk averse after losing the tournament than after randomly earning the same low payoff. In contrast, males do not become more risk-seeking after winning the tournament, while females' average risk-taking behaviour is unaffected by tournament participation and outcomes. We interpret our findings in terms of males' reaction to negative outcomes driven by intrinsic motives, such as emotions or a shift in the locus of control from internal to external.

Suggested Citation

  • Filippin, Antonio & Gioia, Francesca, 2017. "Competition and Subsequent Risk-Taking Behaviour: Heterogeneity across Gender and Outcomes," IZA Discussion Papers 10792, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10792
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    Cited by:

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    2. Shastry, Gauri Kartini & Shurchkov, Olga & Xia, Lingjun Lotus, 2020. "Luck or skill: How women and men react to noisy feedback," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 88(C).
    3. 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.
    4. Francesca Gioia, 2019. "Incentive schemes and peer effects on risk behaviour: an experiment," Theory and Decision, Springer, vol. 87(4), pages 473-495, November.
    5. Bose, Subir & Ladley, Daniel & Li, Xin, 2020. "The role of hormones in financial markets," International Review of Financial Analysis, Elsevier, vol. 67(C).
    6. Colasante, Annarita & Riccetti, Luca, 2021. "Financial and non-financial risk attitudes: What does it matter?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).

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    More about this item

    Keywords

    risk attitudes; competition; gender;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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