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

Listed author(s):
  • Filippin, Antonio

    ()

    (University of Milan)

  • Gioia, Francesca

    ()

    (University of Edinburgh)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10792.

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Length: 20 pages
Date of creation: May 2017
Handle: RePEc:iza:izadps:dp10792
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  27. Simon Haenni, 2016. "Do Setbacks Delay the Participation in Repeated Competitions? Evidence from a Natural Experiment with Amateur Tennis Players," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 16.13, Université de Lausanne, Faculté des HEC, DEEP.
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