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

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 14-083/I

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Economics of Gender; Non-labor Discrimination ; Labor Economics: General
• Subject: competition ; challenge seeking ; career decisions ; laboratory experiment ; gender

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Buser, Thomas
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/107792
• Last update: 10.03.2025, 11:45 AM CET