Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment

Jose Apesteguia and Ignacio Palacios-Huerta

American Economic Review, 2010, vol. 100, issue 5, 2548-64

Abstract: Emotions can have important effects on performance and socioeconomic outcomes. We study a natural experiment where two teams of professionals compete in a tournament taking turns in a sequence. As the sequential order is determined by the random outcome of a coin flip, the treatment and control groups are determined via explicit randomization. Hence, absent any psychological effects, both teams should have the same probability of winning. Yet, we find a systematic first-mover advantage. Further, professionals are self-aware of their own psychological effects and, when given the chance, they rationally react by systematically taking advantage of these effects. (JEL C93, D03, D82, L83)

Date: 2010
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Citations: View citations in EconPapers (172)

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Working Paper: Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment (2008)
Working Paper: Psychological pressure in competitive environments: Evidence from a randomized natural experiment (2008)
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