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Are competitors forward looking in strategic interactions? Field evidence from multistage tournaments

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  • Lackner, Mario
  • Stracke, Rudi
  • Sunde, Uwe
  • Winter-Ebmer, Rudolf

Abstract

This paper investigates whether decision makers are forward looking in dynamic strategic interactions and incorporate variations of continuation values in their choices. Using data from professional and semi-professional basketball tournaments, we find that the expected relative strength of a team in future interactions indeed affects behavior in the present. The results also show that the response to changes in the continuation value is stronger if the structure of prizes is convex across stages, if the players are in a decisive game and if the prevalence of free riding within a team is low.

Suggested Citation

  • Lackner, Mario & Stracke, Rudi & Sunde, Uwe & Winter-Ebmer, Rudolf, 2020. "Are competitors forward looking in strategic interactions? Field evidence from multistage tournaments," Munich Reprints in Economics 84747, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:84747
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    Cited by:

    1. Enzo Brox & Daniel Goller, 2024. "Tournaments, Contestant Heterogeneity and Performance," Papers 2401.05210, arXiv.org, revised Oct 2024.
    2. Deutscher, Christian & Neuberg, Lena & Thiem, Stefan, 2023. "Who’s afraid of the GOATs? - Shadow effects of tennis superstars," Journal of Economic Psychology, Elsevier, vol. 99(C).
    3. Bhattacharya, Puja & Rampal, Jeevant, 2024. "Contests within and between groups: Theory and experiment," Games and Economic Behavior, Elsevier, vol. 145(C), pages 467-492.

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    More about this item

    JEL classification:

    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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