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"Success Breeds Success" or "Pride Goes Before a Fall"? Teams and Individuals in Multi-contest Tournaments

Listed author(s):
  • Qiang Fu
  • Changxia Ke
  • Fangfang Tan

We study the impact of progress feedback on players' performance in multi-contest team tournaments, in which team members' efforts are not directly substitutable. In particular, we employ a real-effort laboratory experiment to understand, in a best-of-three tournament, how players' strategic mindsets change when they compete on a team compared to when they compete individually. Our data corroborate the theoretical predictions for teams: Neither a lead nor a lag in the first component contest affects a team's performance in the subsequent contests. In individual tournaments, however, contrary to the theoretical prediction, we observe that leaders perform worse - but laggards perform better - after learning the outcome of the first contest. Our findings offer the first empirical evidence from a controlled laboratory of the impact of progress feedback between team and individual tournaments, and contribute new insights on team incentives.

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File URL: http://www.tax.mpg.de/RePEc/mpi/wpaper/TAX-MPG-RPS-2013-06_3.pdf
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Paper provided by Max Planck Institute for Tax Law and Public Finance in its series Working Papers with number tax-mpg-rps-2013-06.

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Length: 58 pages
Date of creation: Oct 2013
Handle: RePEc:mpi:wpaper:tax-mpg-rps-2013-06
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