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Leading-effect vs. Risk-taking in Dynamic Tournaments: Evidence from a Real-life Randomized Experiment

Author

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  • Mueller-Langer, Frank
  • Andreoli-Versbach, Patrick

Abstract

Two 'order effects' may emerge in dynamic tournaments with information feedback. First, participants adjust effort across stages, which could advantage the leading participant who faces a larger 'effective prize' after an initial victory (leading-effect). Second, participants lagging behind may increase risk at the final stage as they have 'nothing to lose' (risk-taking). We use a randomized natural experiment in professional two-game soccer tournaments where the treatment (order of a stage-specific advantage) and team characteristics, e.g. ability, are independent. We develop an identification strategy to test for leading-effects controlling for risk-taking. We find no evidence of leading-effects and negligible risk-taking effects.

Suggested Citation

  • Mueller-Langer, Frank & Andreoli-Versbach, Patrick, 2013. "Leading-effect vs. Risk-taking in Dynamic Tournaments: Evidence from a Real-life Randomized Experiment," Discussion Papers in Economics 15452, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenec:15452
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    References listed on IDEAS

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    Cited by:

    1. Adams, Nathan R. & Waddell, Glen R., 2017. "Performance and Risk Taking under Threat of Elimination," IZA Discussion Papers 10977, Institute for the Study of Labor (IZA).
    2. repec:eee:jeborg:v:156:y:2018:i:c:p:41-54 is not listed on IDEAS

    More about this item

    Keywords

    Tournaments; order effects; leading-effect; risk-taking; randomized natural experiments;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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