The Impact of Losing in a Competition on the Willingness to seek Further Challenges

Thomas Buser

No 14-083/I, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: How do people react to setbacks and successes? I introduce a new measure of challenge-seeking to determine the effect of winning and losing in a competition on the willingness to seek further challenges. Participants in a lab experiment compete in two-person tournaments and are then informed of their score and the outcome of the competition. Conditional on the score, winning or losing is random. Participants then have to decide on a performance target for a second round: the higher the target, the higher the potential reward, but participants who do not reach the target earn nothing. I find that, conditional on first round scores, losers go for a more challenging target but perform worse, leading to lower earnings and a higher probability of failure. These findings could have important implications for our understanding of individual career paths. Early outcomes coul d alter the probability of success and failure in the long term.

Keywords: competition; challenge seeking; career decisions; laboratory experiment; gender (search for similar items in EconPapers)
JEL-codes: C91 D03 J01 J16 (search for similar items in EconPapers)
Date: 2014-07-07
New Economics Papers: this item is included in nep-exp
References: Add references at CitEc
Citations: View citations in EconPapers (5)

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Working Paper: The Impact of Losing in a Competition on the Willingness to Seek Further Challenges (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20140083

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