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Economics Department Seminar
Thursday, March 28, 2013
3:30 PM - 5:00 PM
McLaren Conference Center 251 - Venue
Events and Lectures
Guest Speaker Seminar Series: Fangfang Tan
Research fellow in behavioral/experimental public economics at the Max Planck Institute
Date: Thursday 4/18/13
Place: MC 251
"Success breeds success" or "Pride goes before a fall"? Individuals and teams in the best-of-three contests
An established conclusion in sequential multi-battle contest studies is the strategic discouragement effect: Albeit ex-ante homogeneous in ability, contestants who are behind their opponents in early battles tend to be more likely to lose the contest. We show that, both theoretically and empirically, such strategic discouragement effect does not hold when individual contestants compete in a team. In a real-effort laboratory experiment, we compare individual with team pairwise best-of-three contests, where the winner (an individual or a team) is the one who achieves higher scores in (at least) two out of three contests. Experiments corroborate theoretical predictions for team pairwise contests but reject those for individual contests. More specifically, in team contests, neither winning nor losing (in previous rounds) biases the performances of contestants competing in subsequent rounds. In individual contests, however, first-round winners reduce effort while first-round losers increase effort if provided with feedback. Our findings highlight the importance of incorporating contest structure to the design of feedback mechanisms in organizations.
For more information, please contact Catrina Hayes at email@example.com
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