Anticipatory effects of competition on confidence and risk preference

Stephen Cheung and Vindesh Nadan

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2025, vol. 116, issue C

Abstract: We study anticipatory changes in confidence and risk preference aroused by the prospect of future competition. Participants in our treatment group are told they will later participate in a tournament, while those in the control group are told they will work for a piece rate. Beliefs over relative ability and risk attitudes are measured prior to this prospective task. We find no anticipatory effect on confidence in relative ability, but a significant effect on risk preference. Specifically, the treatment increases risk aversion in males, but not in females, such that the conventional gender difference in risk preference is neutralized.

Keywords: Overconfidence; Risk preference; Anticipation of competition; Gender differences (search for similar items in EconPapers)
JEL-codes: C91 D91 M52 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:116:y:2025:i:c:s2214804325000345

DOI: 10.1016/j.socec.2025.102367

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