Information and Competition Entry
This paper studies the influence of information on entry choices in a competition with a controlled laboratory experiment. We investigate whether information provision attracts mainly high productivity individuals and reduces competition failure, where competition failure occurs when a subject loses the competition because the opponent holds a higher productivity. Information on the opponent is a promising nudge to raise individuals' awareness towards the complexity of the decision problem and to update beliefs about success. In the experiment, subjects face the choice between a competition game and a safe outside option. We analyze subjects' entry behavior with a benchmark treatment without information and three treatments, where we exogenously manipulate the information on the opponents. Our results are, (1) information on the productivity distribution of all potential opponents reduces competition failures by more than 50%, (2) information on the distribution is sufficient, i.e. precise information on the matched opponent's type does not further diminish failure rates.
|Date of creation:||Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Reuben, Ernesto & Rey-Biel, Pedro & Sapienza, Paola & Zingales, Luigi, 2012.
"The emergence of male leadership in competitive environments,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 83(1), pages 111-117.
- Reuben, Ernesto & Rey-Biel, Pedro & Sapienza, Paola & Zingales, Luigi, 2010. "The Emergence of Male Leadership in Competitive Environments," IZA Discussion Papers 5300, Institute for the Study of Labor (IZA).
- Bjorn Bartling & Ernst Fehr & Michel Andre Marechal & Daniel Schunk, 2009. "Egalitarianism and Competitiveness," American Economic Review, American Economic Association, vol. 99(2), pages 93-98, May.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Muriel Niederle & Lise Vesterlund, 2005.
"Do Women Shy Away From Competition? Do Men Compete Too Much?,"
NBER Working Papers
11474, National Bureau of Economic Research, Inc.
- Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away from Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 1067-1101, 08.
- Muriel Niederle & Lise Vesterlund, 2005. "Do Women Shy Away from Competition? Do Men Compete too Much?," Discussion Papers 04-030, Stanford Institute for Economic Policy Research.
- Philipp Köllinger & Maria Minniti & Christian Schade, 2005.
""I Think I Can, I Think I Can": Overconfidence and Entrepreneurial Behavior,"
Discussion Papers of DIW Berlin
501, DIW Berlin, German Institute for Economic Research.
- Koellinger, Philipp & Minniti, Maria & Schade, Christian, 2007. ""I think I can, I think I can": Overconfidence and entrepreneurial behavior," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 502-527, August.
- repec:cup:cbooks:9780521465618 is not listed on IDEAS
- Ewers, Mara & Zimmermann, Florian, 2012. "Image and Misreporting," IZA Discussion Papers 6425, Institute for the Study of Labor (IZA).
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6411. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.