Choosing Competition on Behalf of Someone Else

Helena Fornwagner (), Monika Pompeo () and Nina Serdarevic ()
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Helena Fornwagner: Department of Economics and Econometrics, University of Regensburg, 93053 Regensburg, Germany; Department of Economics, University of Exeter, Exeter EX4 4PU, United Kingdom
Monika Pompeo: Department of Economics, University of Bologna, 40126 Bologna, Italy
Nina Serdarevic: FAIR Insight Team, Centre for Applied Research, 5045 Bergen, Norway

Management Science, 2023, vol. 69, issue 3, 1555-1574

Abstract: We extend the existing literature on gender differences in competitive behavior by investigating tournament entry choices when a principal decides for an agent. In a laboratory experiment, we randomly assign subjects the role of either principal or agent. The principal decides whether the agent performs a real-effort task under piece-rate or tournament incentives. When deciding, the principal is informed about the agent’s previous performance, age, and residency. Between treatments, we vary whether the principal knows the agent’s gender. In a baseline treatment, we replicate the standard setting in which subjects decide for themselves whether to compete. Our main findings are, first, that there is no gender gap in tournament entry when principals decide for agents as opposed to the baseline treatment. Second, the gender gap closes because more women are made to compete by principals. Third, whereas there is no gender gap in either of the principal treatments, revealing the agent’s gender is associated with higher overall tournament entry rates. Exploratory analyses of principals’ choice determinants reveal a positive effect of preferences to take risks, competitiveness, and confidence in agents’ performances on making agents compete. In addition, we find no difference in how principals evaluate male and female agents’ performances. Finally, we test the efficiency of principals’ competition choices and show that they lead to fewer payoff-maximizing outcomes than when subjects decide for themselves. Additionally, overall tournament performances and winners’ performances are lower when agents are made to compete, but this effect is not robust to controlling for agents’ previous performances.

Keywords: competitiveness; gender differences; decision making for others; laboratory experiment (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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