Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field

Mario Lackner, Rudi Stracke, Uwe Sunde and Rudolf Winter-Ebmer

No 319, Economics Series from Institute for Advanced Studies

Abstract: This paper investigates empirically whether decision makers are forward looking in dynamic strategic interactions. In particular, we test whether decision makers in multi-stage tournaments take heterogeneity induced changes of continuation values and the ability of their immediate opponent into account when choosing effort. Using data from professional and semi-professional basketball tournaments, we find that effort is negatively affected by the ability of the current opponent, consistent with the theoretical prediction and previous evidence. More importantly, the results indicate that the expected relative strength in future interactions does affect behavior in earlier stages, which provides support for the 'standard' view that decision makers are forward looking in dynamic strategic interactions.

Keywords: Promotion tournament; multi-stage contest; elimination; forward-looking behavior; heterogeneity (search for similar items in EconPapers)
JEL-codes: D84 D90 J33 M51 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2015-11
New Economics Papers: this item is included in nep-agr, nep-cse and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://irihs.ihs.ac.at/id/eprint/3797 First version, 2015 (application/pdf)

Related works:
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are competitors forward looking in strategic interactions?: evidence from the field (2015)
Working Paper: Are competitors forward looking in strategic interactions? Evidence from the field (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ihs:ihsesp:319

Ordering information: This working paper can be ordered from
Institute for Advanced Studies - Library, Josefstädterstr. 39, A-1080 Vienna, Austria

Access Statistics for this paper

More papers in Economics Series from Institute for Advanced Studies Josefstädterstr. 39, A-1080 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Doris Szoncsitz ().