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

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  • Qiang Fu
  • Changxia Ke
  • Fangfang Tan

Abstract

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.

Suggested Citation

  • Qiang Fu & Changxia Ke & Fangfang Tan, 2013. ""Success Breeds Success" or "Pride Goes Before a Fall"? Teams and Individuals in Multi-contest Tournaments," Working Papers tax-mpg-rps-2013-06, Max Planck Institute for Tax Law and Public Finance.
  • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2013-06
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    Cited by:

    1. Romain Gauriot & Lionel Page, 2014. "Does success breed success? A quasi-experiment on strategic momentum in dynamic contests," QuBE Working Papers 028, QUT Business School.

    More about this item

    Keywords

    Multi-contest Tournaments; Real Effort; Feedback; Team Incentive; Experiment;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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