"Success Breeds Success" or "Pride Goes Before a Fall?": Teams and Individuals in Multi-contest Tournaments

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Motivation is an art to which information is the key. Updated strategy based on the respective situation is crucial for politicians, bosses, parents, coaches and all the world’s leaders. A recently published paper by Qiang Fu, Changxia Ke and Fangfang Tan offers first empirical evidence of the impact of progress feedback on player’s motivation, comparing team and individual tournaments, and contributing to new insights on team incentives. The economists show: The leader in a competition performs worse when he realises his advantageous position, whereas the laggard will benefit from knowing that he lies behind. This applies to individual contestants, but not to contestants competing in a team.

The economists set up a best-of-three contest in the laboratory to better understand how players’ strategic mindsets change as an effect of feedback. One condition simulated the competition between two rival teams, each team consisting of three players. Each player plays and decides one of the three contest games. The team that is first to win two games is the winner of the overall contest and is rewarded with a prize. The players were informed of whether their teammate had won or lost their game in the previous round. In a control phase the players did not get any feedback on the team performance so far. The paper shows that in team contests neither winning nor losing in previous rounds biases the performance of contestants competing in subsequent rounds.

In addition, to analyse how progress feedback might differ between team tournaments and individual tournaments, the economists studied an experiment in which individual players competed on their own behalf. Contrary to the predictions of game theory, Fu, Ke and Tan showed that in individual contests, first-round winners reduce their effort while first-round losers increase their effort if provided with feedback. According to Fu, Ke and Tan, possible explanation for the divergent behaviour between individual competitors and competitors in a team is provided by the “utility of winning”, which considers the psychological satisfaction from winning.
 

Veröffentlichung:   Games and Economic Behavoir, 2015, 94, S. 57-76