Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment
- (pp. 2548-64)
Abstract
Emotions can have important effects on performance and socioeconomic outcomes. We study a natural experiment where two teams of professionals compete in a tournament taking turns in a sequence. As the sequential order is determined by the random outcome of a coin flip, the treatment and control groups are determined via explicit randomization. Hence, absent any psychological effects, both teams should have the same probability of winning. Yet, we find a systematic first-mover advantage. Further, professionals are self-aware of their own psychological effects and, when given the chance, they rationally react by systematically taking advantage of these effects. (JEL C93, D03, D82, L83)Citation
Apesteguia, Jose, and Ignacio Palacios-Huerta. 2010. "Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment." American Economic Review, 100 (5): 2548-64. DOI: 10.1257/aer.100.5.2548Additional Materials
JEL Classification
- C93 Field Experiments
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- D82 Asymmetric and Private Information
- L83 Sports; Gambling; Recreation; Tourism