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Leading-Effect, Risk-Taking and Sabotage in Two-Stage Tournaments: Evidence from a Natural Experiment

Frank Mueller-Langer () and Patrick Andreoli-Versbach ()

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2017, vol. 237, issue 1, 1-28

Abstract: Existing theory suggests that three “order effects” may emerge in multi-stage tournaments with information feedback. First, participants adjust effort across stages, which could advantage the leading participant who faces a larger “effective prize” after an initial victory (leading-effect). Second, leading participants might engage in sabotage activities to protect their lead thereby decreasing the rivals’ output. Finally, participants lagging behind may increase risk at the final stage as they have “nothing to lose” (risk-taking). The expected order effects based on existing theory cannot be supported empirically in a natural experiment setting, where professional teams compete in a two-stage tournament with asymmetric initial conditions and clear incentives.

Keywords: tournaments; order effects; leading-effect; risk-taking; sabotage; natural experiments (search for similar items in EconPapers)
JEL-codes: C21 C93 D72 (search for similar items in EconPapers)
Date: 2017
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