Are competitors forward looking in strategic interactions? Evidence from the field

Arbeitspapier

This paper investigates empirically whether decision makers are forward looking in dynamic strategic interactions. In particular, we test whether decision makers in multi-stage 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper, CD-Lab Aging, Health and the Labor Market, Johannes Kepler University ; No. 1509

Classification and Topics

• Classification: Wirtschaft ; Expectations; Speculations ; Micro-Based Behavioral Economics: General‡ ; Personnel Economics: Firm Employment Decisions; Promotions ; Compensation Packages; Payment Methods
• Subject: Promotion tournament ; multi-stage contest ; elimination ; forward-looking behavior ; heterogeneity ; Leistungsmotivation ; Strategie ; Extensives Spiel ; Wettbewerb ; Basketball ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lackner, Mario ; Stracke, Rudi ; Sunde, Uwe ; Winter-Ebmer, Rudolf
• Event: Veröffentlichung
• (who): Johannes Kepler University Linz, Christian Doppler Laboratory Aging, Health and the Labor Market
• (where): Linz
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/148258
• Last update: 10.03.2025, 11:44 AM CET