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Competing on the Holodeck: The Effect of Virtual Peers and Heterogeneity in Dynamic Tournaments

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  • Graff, Frederik

    (RWTH Aachen University)

  • Grund, Christian

    (RWTH Aachen University)

  • Harbring, Christine

    (RWTH Aachen University)

Abstract

We propose experiments in virtual reality (VR) as a new approach to examining behavior in an economic context, e.g., heterogeneity in dynamic tournaments. We simulate a realistic working situation in a highly immersive environment. Implementing a tournament in VR, we are able to mitigate the reflection problem, which usually undermines research on dynamic interaction. Moreover, VR allows us to ceteris paribus control for the performance of the virtual peer (humanoid avatar), and thus to get an understanding of the reaction of the subject to the avatar in a really dynamic setting, as the subject is constantly able to observe the avatar's performance. Based on a first experimental phase, we match our subjects with an avatar yielding a specific output. We observe that the subjects' performance is highest in a homogeneous tournament, i.e., when they compete against an avatar achieving the same output as they did in the preceding phase. Interestingly, these results are particularly driven by peer effects rather than by tournament incentives. We extensively track the behavior of subjects and the particular situation and, e.g., examine the role of intermediate score differences and the degree of the subjects' movements.

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  • Graff, Frederik & Grund, Christian & Harbring, Christine, 2018. "Competing on the Holodeck: The Effect of Virtual Peers and Heterogeneity in Dynamic Tournaments," IZA Discussion Papers 11919, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11919
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    1. Gürerk, Özgür & Bönsch, Andrea & Kittsteiner, Thomas & Staffeldt, Andreas, 2019. "Virtual humans as co-workers: A novel methodology to study peer effects," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 17-29.
    2. Faralla, Valeria & Innocenti, Alessandro & Baraldi, Stefano & Ermini, Sara & Lusuardi, Luca & Masini, Maurizio & Santalucia, Vincenzo & Scaruffi, Diletta & Sirizzotti, Matteo, 2024. "Exposure to immersive virtual environments decreases present bias," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).

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    More about this item

    Keywords

    reflection problem; tournament; peer effects; real effort; virtual reality; avatar; heterogeneity;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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