"Success Breeds Success" or "Pride Goes Before a Fall"? Teams and Individuals in Multi-contest Tournaments

Qiang Fu, Changxia Ke and Fangfang Tan

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: We study the impact of progress feedback on players' performance in multi-contest team tournaments, in which team members' efforts are not directly substitutable. In particular, we employ a real-effort laboratory experiment to understand, in a best-of-three tournament, how players' strategic mindsets change when they compete on a team compared to when they compete individually. Our data corroborate the theoretical predictions for teams: Neither a lead nor a lag in the first component contest affects a team's performance in the subsequent contests. In individual tournaments, however, contrary to the theoretical prediction, we observe that leaders perform worse - but laggards perform better - after learning the outcome of the first contest. Our findings offer the first empirical evidence from a controlled laboratory of the impact of progress feedback between team and individual tournaments, and contribute new insights on team incentives.

Keywords: Multi-contest Tournaments; Real Effort; Feedback; Team Incentive; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D72 D74 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2013-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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