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Process Utility in High-Stakes Competition

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  • Dupuy, Arnaud

    (University of Luxembourg)

Abstract

We study how individuals trade off outcome (what) and process (how) utility in high-stakes strategic decisions. We exploit optimality conditions and high-frequency choices in professional tennis to derive nonparametric bounds on process utility and implement a structural approach to estimate player-specific preferences. Under mild shape restrictions, these bounds imply that a large majority of players place positive weight on process utility. Our structural estimates further show that most players systematically sacrifice success probabilities to increase process utility, generating economically meaningful effects on match outcomes and expected earnings.

Suggested Citation

  • Dupuy, Arnaud, 2026. "Process Utility in High-Stakes Competition," IZA Discussion Papers 18625, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18625
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    References listed on IDEAS

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    1. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 917-962.
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    4. Klaassen F. J G M & Magnus J. R., 2001. "Are Points in Tennis Independent and Identically Distributed? Evidence From a Dynamic Binary Panel Data Model," Journal of the American Statistical Association, American Statistical Association, vol. 96, pages 500-509, June.
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    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions

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