Are competitors forward looking in strategic interactions?: evidence from the field

Mario Lackner, R. Stracke, Uwe Sunde and Rudolf Winter-Ebmer

No 37, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: This paper investigates empirically whether decision makers are forward looking in dynamic strategic interactions. In particular, we test whether decision makers in multistage tournaments take heterogeneity induced changes of continuation values and the ability of their immediate opponent into account when choosing effort. Using data from professional and semi-professional basketball tournaments, we find that effort is negatively affected by the ability of the current opponent, consistent with the theoretical prediction and previous evidence. More importantly, the results indicate that the expected relative strength in future interactions does affect behavior in earlier stages, which provides support for the 'standard’ view that decision makers are forward looking in dynamic strategic interactions.

Date: 2015-01-01
New Economics Papers: this item is included in nep-cse and nep-exp
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field (2015)
Working Paper: Are competitors forward looking in strategic interactions? Evidence from the field (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2015037

DOI: 10.26481/umagsb.2015037

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