A structural analysis of disappointment aversion in a real effort competition
A structural analysis of disappointment aversion in a real effort competition
We develop a novel computerized real effort task, based on moving sliders across a screen, to test experimentally whether agents are disappointment averse when they compete in a real effort sequential-move tournament. Our theory predicts that a disappointment averse agent, who is loss averse around her endogenous expectations-based reference point, responds negatively to her rival’s effort. We find significant evidence for this discouragement effect, and use the Method of Simulated Moments to estimate the strength of disappointment aversion on average and the heterogeneity in disappointment aversion across the population.
University of Southampton
Gill, David
2319117f-b14e-48c6-8a33-34f5c9d4e2ea
Prowse, Victoria Liza
4b084475-a150-45ff-93b2-101f100688c4
March 2010
Gill, David
2319117f-b14e-48c6-8a33-34f5c9d4e2ea
Prowse, Victoria Liza
4b084475-a150-45ff-93b2-101f100688c4
Gill, David and Prowse, Victoria Liza
(2010)
A structural analysis of disappointment aversion in a real effort competition
(Discussion Papers in Economics and Econometrics, 1006)
Southampton, GB.
University of Southampton
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Monograph
(Working Paper)
Abstract
We develop a novel computerized real effort task, based on moving sliders across a screen, to test experimentally whether agents are disappointment averse when they compete in a real effort sequential-move tournament. Our theory predicts that a disappointment averse agent, who is loss averse around her endogenous expectations-based reference point, responds negatively to her rival’s effort. We find significant evidence for this discouragement effect, and use the Method of Simulated Moments to estimate the strength of disappointment aversion on average and the heterogeneity in disappointment aversion across the population.
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Published date: March 2010
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Local EPrints ID: 150029
URI: http://eprints.soton.ac.uk/id/eprint/150029
ISSN: 0966-4246
PURE UUID: 0e1e7e20-f936-4f23-8f9d-de01a71a9060
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Date deposited: 04 May 2010 09:13
Last modified: 10 Dec 2021 17:57
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Contributors
Author:
David Gill
Author:
Victoria Liza Prowse
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