Leading-effect vs. Risk-taking in Dynamic Tournaments: Evidence from a Real-life Randomized Experiment
Frank Mueller-Langer () and
Patrick Andreoli-Versbach ()
Discussion Papers in Economics from University of Munich, Department of Economics
Two 'order effects' may emerge in dynamic 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, participants lagging behind may increase risk at the final stage as they have 'nothing to lose' (risk-taking). We use a randomized natural experiment in professional two-game soccer tournaments where the treatment (order of a stage-specific advantage) and team characteristics, e.g. ability, are independent. We develop an identification strategy to test for leading-effects controlling for risk-taking. We find no evidence of leading-effects and negligible risk-taking effects.
Keywords: Tournaments; order effects; leading-effect; risk-taking; randomized natural experiments (search for similar items in EconPapers)
JEL-codes: C93 C21 D01 L83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm and nep-upt
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