Leading-effect vs. Risk-taking in Dynamic Tournaments - Evidence from a 
Real-life Randomized Experiment

Mueller-Langer, Frank; Andreoli-Versbach, Patrick

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Leading-effect vs. Risk-taking in Dynamic Tournaments - Evidence from a Real-life Randomized Experiment

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Mueller-Langer, Frank
MPI for Intellectual Property and Competition Law, Max Planck Society;

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Andreoli-Versbach, Patrick
MPI for Intellectual Property and Competition Law, Max Planck Society;

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http://epub.ub.uni-muenchen.de/15452/
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Citation

Mueller-Langer, F., & Andreoli-Versbach, P. (2013). Leading-effect vs. Risk-taking in Dynamic Tournaments - Evidence from a Real-life Randomized Experiment. Munich Discussion Paper, No. 2013-6.

Cite as: https://hdl.handle.net/11858/00-001M-0000-0013-77FB-2

Abstract

Two “order effects” may emerge in dynamic tournaments with information feedback. First, participants adjust effort across stages, which could advantage the leading participant who faces a larger “effective prize” after an initial victory (leading-effect). Second, participants lagging behind may increase risk at the final stage as they have “nothing to lose” (risk-taking). We use a randomized natural experiment in professional two-game soccer tournaments where the treatment (order of a stage-specific advantage) and team characteristics, e.g. ability, are independent. We develop an identification strategy to test for leading-effects controlling for risk-taking. We find no evidence of leading-effects and negligible risk-taking effects.