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Know when to fold 'em: The grit factor

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Abstract

This paper investigates the way different sides of grit inflence behavior. In addition to grit's upside in achieving economic success associated with not giving up, it might also have a downside associated with not letting go. We split grit into two new categories, tenacity and diligence, and hypothesize that tenacity can lead individuals to go beyond their own intended plan of action when making a loss. We test the predictions with an experiment that elicits each individual's plan of action which we compare to actual choice in a game of luck. Consistent with our priors, grittier individuals have a higher tendency to overplay, and tenacity alone captures the difficulty in respecting ex-ante preferences when this means accepting defeat. We then discuss the external validity of our findings.

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  • Larbi Alaoui & Christian Fons-Rosen, 2016. "Know when to fold 'em: The grit factor," Economics Working Papers 1521, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2021.
    • Handle: RePEc:upf:upfgen:1521
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    Cited by:

    1. Gerhards, Leonie & Gravert, Christina, 2020. "Because of you I did not give up – Peer effects in perseverance," Journal of Economic Psychology, Elsevier, vol. 81(C).
    2. Pinger, Pia & Schäfer, Sebastian & Schumacher, Heiner, 2018. "Locus of control and consistent investment choices," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 66-75.
    3. Pinger, Pia & Schäfer, Sebastian & Schumacher, Heiner, 2018. "Locus of control and consistent investment choices," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 66-75.

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    More about this item

    Keywords

    noncognitive skills; grit; tenacity; diligence.;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • I20 - Health, Education, and Welfare - - Education - - - General

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