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Ever tried. Ever failed. No matter? On the demotivational effect of losing in repeated competitions

Simon Haenni

Games and Economic Behavior, 2019, vol. 115, issue C, 346-362

Abstract: Many important life goals require repeated confrontation with competitors. Losing in such competitions may discourage individuals and make them postpone further competitions, thereby harming future prospects. I use data on 44,799 amateur tennis players, who are randomly paired in repeated competitions, to study the causal effect of losing on the time to the next tournament participation. Results show that individuals wait on average 10% longer to enroll again after losing. Furthermore, losing against relatively weaker opponents leads to a discontinuously larger effect than losing against relatively stronger opponents, indicating that individuals do not rationally update beliefs about winning probabilities but instead use their ranking as reference point when evaluating defeats.

Keywords: Competition; Natural experiment; Reference points (search for similar items in EconPapers)
JEL-codes: D03 D81 L83 (search for similar items in EconPapers)
Date: 2019
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