Disappointment aversion in tournaments
Many experiments and field studies indicate that individuals have an asymmetric attitude towards gains versus losses. In this paper, we extend the canonic tournament model by assuming the workers' preferences exhibit disappointment aversion. First, we find the winning prize is first increasing...
Saved in:
| Published in | Managerial and decision economics Vol. 43; no. 1; pp. 26 - 30 |
|---|---|
| Main Author | |
| Format | Journal Article |
| Language | English |
| Published |
Chichester
Wiley Periodicals Inc
01.01.2022
|
| Subjects | |
| Online Access | Get full text |
Cover
Loading…
| Abstract | Many experiments and field studies indicate that individuals have an asymmetric attitude towards gains versus losses. In this paper, we extend the canonic tournament model by assuming the workers' preferences exhibit disappointment aversion. First, we find the winning prize is first increasing and then decreasing in volatility and the losing prize shows the opposite. Furthermore, when the volatility exceeds a threshold, both the winning and losing prizes are reduced to zero. By contrast, there is no such kink for the risk aversion case. Finally, we find the piece rates always dominate rank‐order tournaments when the workers are disappointment averse. |
|---|---|
| AbstractList | Many experiments and field studies indicate that individuals have an asymmetric attitude towards gains versus losses. In this paper, we extend the canonic tournament model by assuming the workers' preferences exhibit disappointment aversion. First, we find the winning prize is first increasing and then decreasing in volatility and the losing prize shows the opposite. Furthermore, when the volatility exceeds a threshold, both the winning and losing prizes are reduced to zero. By contrast, there is no such kink for the risk aversion case. Finally, we find the piece rates always dominate rank‐order tournaments when the workers are disappointment averse. Abstract Many experiments and field studies indicate that individuals have an asymmetric attitude towards gains versus losses. In this paper, we extend the canonic tournament model by assuming the workers' preferences exhibit disappointment aversion. First, we find the winning prize is first increasing and then decreasing in volatility and the losing prize shows the opposite. Furthermore, when the volatility exceeds a threshold, both the winning and losing prizes are reduced to zero. By contrast, there is no such kink for the risk aversion case. Finally, we find the piece rates always dominate rank‐order tournaments when the workers are disappointment averse. |
| Author | Wu, Yaoyao |
| Author_xml | – sequence: 1 givenname: Yaoyao orcidid: 0000-0001-9713-5830 surname: Wu fullname: Wu, Yaoyao email: wu_july@126.com organization: Wuhan University |
| BookMark | eNp10M9LwzAUwPEgE-ym4J9QEMRL50uTpslRtvkDJl70HNI0hYw2qUmn7L9fu3n19ODx4fH4ztHMeWcQusWwxAD5Y1ebJSEFu0AJBiEyTBmfoQQwJRkrSrhC8xh3AEA5FQm6X9uo-t5bN3TGDan6MSFa71Lr0sHvg1PTOl6jy0a10dz8zQX6et58rl6z7cfL2-ppm2nCCcvKnOSaMtzoEkhFNBRCc640ryluKlVyUVaY56oGQoxgmjNRVYYZTVVTU27IAt2d7_bBf-9NHOTu9EQbZc4wUCZIUYzq4ax08DEG08g-2E6Fg8QgpwpyrCCnCiPNzvTXtubwr5Pv683JHwEm8F6Z |
| CitedBy_id | crossref_primary_10_1002_mde_3411 |
| Cites_doi | 10.1016/j.jfineco.2004.03.009 10.1086/261439 10.1016/j.geb.2010.01.002 10.1257/aer.97.4.1047 10.1016/j.ijindorg.2012.11.007 10.1016/0022-0531(90)90053-M 10.2307/2938223 10.1086/261010 10.1257/aer.102.1.469 10.1111/j.1430-9134.2005.00039.x 10.1162/qjec.121.4.1133 10.1086/381253 10.1086/705668 10.1007/s00199-017-1072-x 10.1007/s00712-011-0222-z 10.1016/j.econlet.2010.11.040 10.2307/1914185 10.1111/j.1540-6261.2009.01482.x 10.1016/j.jebo.2007.08.002 |
| ContentType | Journal Article |
| Copyright | 2021 John Wiley & Sons, Ltd. 2022 John Wiley & Sons, Ltd. |
| Copyright_xml | – notice: 2021 John Wiley & Sons, Ltd. – notice: 2022 John Wiley & Sons, Ltd. |
| DBID | AAYXX CITATION 8BJ FQK JBE |
| DOI | 10.1002/mde.3356 |
| DatabaseName | CrossRef International Bibliography of the Social Sciences (IBSS) International Bibliography of the Social Sciences International Bibliography of the Social Sciences |
| DatabaseTitle | CrossRef International Bibliography of the Social Sciences (IBSS) |
| DatabaseTitleList | International Bibliography of the Social Sciences (IBSS) CrossRef |
| DeliveryMethod | fulltext_linktorsrc |
| Discipline | Business |
| EISSN | 1099-1468 |
| EndPage | 30 |
| ExternalDocumentID | 10_1002_mde_3356 MDE3356 |
| Genre | article |
| GroupedDBID | -~X .3N .GA .Y3 05W 0R~ 10A 1L6 1OB 1OC 29M 2AX 31~ 33P 3V. 3WU 4.4 4ZD 50Y 50Z 51W 51Y 52M 52O 52Q 52S 52T 52U 52W 5GY 5VS 66C 702 7PT 7WY 8-0 8-1 8-3 8-4 8-5 8FL 8R4 8R5 8UM 8VB 930 A04 AABNI AAESR AAHHS AAONW AAOUF AASGY AAXRX AAZKR ABBHK ABCQN ABCUV ABIJN ABIVO ABJNI ABKVW ABLWH ABPVW ABSOO ABUWG ABXSQ ABYYQ ACAHQ ACBKW ACBWZ ACCFJ ACCZN ACFBH ACGFS ACPOU ACSCC ACXQS ADACV ADBBV ADEMA ADEOM ADEPB ADGDI ADIZJ ADKYN ADMGS ADNFJ ADULT ADXAS ADZMN AEEZP AEIGN AEIMD AEQDE AEUPB AEUQT AEUYR AFAIT AFBPY AFFNX AFFPM AFGKR AFKFF AFKRA AFPWT AFTQD AFZJQ AHAJD AHBTC AIFKG AIURR AIWBW AJBDE AJPNJ AKVCP ALAGY ALMA_UNASSIGNED_HOLDINGS ALUQN AMBMR AMYDB AQSKT ASPBG ASTYK AVWKF AZBYB AZFZN AZVAB BAFTC BDRZF BENPR BEZIV BFHJK BKOMP BMXJE BNVMJ BPHCQ BQESF BROTX BRXPI BY8 CBXGM CCKSF CCPQU CS3 CYVLN D-C D-D DCZOG DJZPD DPXWK DR2 DRFUL DRSSH DWQXO EBO EBS EBU EJD F00 F01 FEDTE FRNLG G-S G.N G50 GENNL GNP GODZA GROUPED_ABI_INFORM_ARCHIVE GROUPED_ABI_INFORM_COMPLETE GROUPED_ABI_INFORM_RESEARCH GUPYA HBH HF~ HGD HGLYW HHY HVGLF HZ~ IPSME IX1 J0M JAAYA JAV JBC JBMMH JBZCM JENOY JHFFW JKQEH JLEZI JLXEF JPC JPL JPPEU JSODD JST K1G K60 K6~ KQQ LATKE LAW LC2 LC4 LEEKS LH4 LITHE LOXES LP6 LP7 LUTES LW6 LYRES M0C M55 MEWTI MK4 MRFUL MRSSH MSFUL MSSSH MXFUL MXSSH N04 N06 N9A NF~ NNB O66 O9- P2W P2Y P4C PALCI PQBIZ PQBZA PQQKQ PROAC Q.N Q11 Q2X QB0 QRW QWB R.K RIWAO RJQFR RNS ROL RWI RX1 RXW SA0 SAMSI SUPJJ TAE TH9 TN5 UB1 V2E V8K W8V W99 WBKPD WEBCB WIB WIH WII WOHZO WQZ WRC WSUWO WWB WXSBR XG1 XV2 ZL0 ZZTAW ~IA ~WP AAYXX CITATION 8BJ FQK JBE |
| ID | FETCH-LOGICAL-c3836-7232c461fc703b3c059c88ac8d41fba7897b182ad033e96c869bbe6ec4afd48e3 |
| IEDL.DBID | DR2 |
| ISSN | 0143-6570 |
| IngestDate | Fri Sep 13 07:01:13 EDT 2024 Fri Aug 23 03:23:14 EDT 2024 Sat Aug 24 00:58:40 EDT 2024 |
| IsPeerReviewed | true |
| IsScholarly | true |
| Issue | 1 |
| Language | English |
| LinkModel | DirectLink |
| MergedId | FETCHMERGED-LOGICAL-c3836-7232c461fc703b3c059c88ac8d41fba7897b182ad033e96c869bbe6ec4afd48e3 |
| ORCID | 0000-0001-9713-5830 |
| PQID | 2610469355 |
| PQPubID | 48879 |
| PageCount | 5 |
| ParticipantIDs | proquest_journals_2610469355 crossref_primary_10_1002_mde_3356 wiley_primary_10_1002_mde_3356_MDE3356 |
| PublicationCentury | 2000 |
| PublicationDate | January 2022 2022-01-00 20220101 |
| PublicationDateYYYYMMDD | 2022-01-01 |
| PublicationDate_xml | – month: 01 year: 2022 text: January 2022 |
| PublicationDecade | 2020 |
| PublicationPlace | Chichester |
| PublicationPlace_xml | – name: Chichester |
| PublicationSubtitle | MDE |
| PublicationTitle | Managerial and decision economics |
| PublicationYear | 2022 |
| Publisher | Wiley Periodicals Inc |
| Publisher_xml | – name: Wiley Periodicals Inc |
| References | 1990; 51 2004; 22 1987; 95 2010; 69 2009; 64 2012; 102 1991; 59 1979; 47 2013; 31 2020; 128 2006; 121 2008; 67 2005; 76 2007; 97 2018; 66 2012; 105 1981; 89 2011; 110 2005; 14 e_1_2_6_10_1 e_1_2_6_20_1 e_1_2_6_9_1 e_1_2_6_8_1 e_1_2_6_19_1 e_1_2_6_5_1 e_1_2_6_4_1 e_1_2_6_7_1 e_1_2_6_6_1 e_1_2_6_13_1 e_1_2_6_14_1 e_1_2_6_3_1 e_1_2_6_11_1 e_1_2_6_2_1 e_1_2_6_12_1 e_1_2_6_17_1 e_1_2_6_18_1 e_1_2_6_15_1 e_1_2_6_16_1 |
| References_xml | – volume: 31 start-page: 223 year: 2013 end-page: 237 article-title: Are tournaments optimal over piece rates under limited liability for the principal? publication-title: International Journal of Industrial Organization – volume: 97 start-page: 1047 year: 2007 end-page: 1073 article-title: Reference‐dependent risk attitudes publication-title: American Economic Review – volume: 102 start-page: 469 year: 2012 end-page: 503 article-title: A structural analysis of disappointment aversion in a real effort competition publication-title: American Economic Review – volume: 14 start-page: 187 year: 2005 end-page: 207 article-title: Envy and compassion in tournaments publication-title: Journal of Economic and Management Strategy – volume: 69 start-page: 346 year: 2010 end-page: 364 article-title: Fairness and desert in tournaments publication-title: Games and Economic Behavior – volume: 110 start-page: 193 year: 2011 end-page: 196 article-title: Overconfidence can improve an agent's relative and absolute performance publication-title: Economics Letters – volume: 47 start-page: 263 year: 1979 end-page: 291 article-title: Prospect theory: An analysis of decision under risk publication-title: Econometrica – volume: 128 start-page: 1901 year: 2020 end-page: 1939 article-title: Information aversion publication-title: Journal of Political Economy – volume: 51 start-page: 111 year: 1990 end-page: 125 article-title: First order versus second order risk aversion publication-title: Journal of Economic Theory – volume: 59 start-page: 667 year: 1991 end-page: 686 article-title: A theory of disappointment aversion publication-title: Econometrica – volume: 64 start-page: 1863 year: 2009 end-page: 1887 article-title: First‐order risk aversion, heterogeneity, and asset market outcomes publication-title: Journal of Finance – volume: 89 start-page: 841 year: 1981 end-page: 864 article-title: Rank‐order tournaments as optimum labor contracts publication-title: Journal of Political Economy – volume: 22 start-page: 353 year: 2004 end-page: 377 article-title: The league composition effect in tournaments with heterogeneous players: An empirical analysis of broiler contracts publication-title: Journal of Labor Economics – volume: 121 start-page: 1133 year: 2006 end-page: 1165 article-title: A model of reference‐dependent preferences publication-title: Quarterly Journal of Economics – volume: 95 start-page: 1 year: 1987 end-page: 33 article-title: Tournaments and piece rates: An experimental study publication-title: Journal of Political Economy – volume: 66 start-page: 901 year: 2018 end-page: 928 article-title: Expectation‐based loss aversion and rank‐order tournaments publication-title: Economic Theory – volume: 67 start-page: 204 year: 2008 end-page: 214 article-title: Emotions in tournaments publication-title: Journal of Economic Behavior and Organization – volume: 76 start-page: 471 year: 2005 end-page: 508 article-title: Why stocks may disappoint publication-title: Journal of Financial Economics – volume: 105 start-page: 161 year: 2012 end-page: 190 article-title: A comparison of cardinal tournaments and piece rate contracts with liquidity constrained agents publication-title: Journal of Economics – ident: e_1_2_6_3_1 doi: 10.1016/j.jfineco.2004.03.009 – ident: e_1_2_6_4_1 doi: 10.1086/261439 – ident: e_1_2_6_8_1 doi: 10.1016/j.geb.2010.01.002 – ident: e_1_2_6_13_1 doi: 10.1257/aer.97.4.1047 – ident: e_1_2_6_19_1 doi: 10.1016/j.ijindorg.2012.11.007 – ident: e_1_2_6_20_1 doi: 10.1016/0022-0531(90)90053-M – ident: e_1_2_6_10_1 doi: 10.2307/2938223 – ident: e_1_2_6_15_1 doi: 10.1086/261010 – ident: e_1_2_6_7_1 doi: 10.1257/aer.102.1.469 – ident: e_1_2_6_9_1 doi: 10.1111/j.1430-9134.2005.00039.x – ident: e_1_2_6_12_1 doi: 10.1162/qjec.121.4.1133 – ident: e_1_2_6_16_1 doi: 10.1086/381253 – ident: e_1_2_6_2_1 doi: 10.1086/705668 – ident: e_1_2_6_6_1 doi: 10.1007/s00199-017-1072-x – ident: e_1_2_6_18_1 doi: 10.1007/s00712-011-0222-z – ident: e_1_2_6_17_1 doi: 10.1016/j.econlet.2010.11.040 – ident: e_1_2_6_11_1 doi: 10.2307/1914185 – ident: e_1_2_6_5_1 doi: 10.1111/j.1540-6261.2009.01482.x – ident: e_1_2_6_14_1 doi: 10.1016/j.jebo.2007.08.002 |
| SSID | ssj0004849 |
| Score | 2.3132498 |
| Snippet | Many experiments and field studies indicate that individuals have an asymmetric attitude towards gains versus losses. In this paper, we extend the canonic... Abstract Many experiments and field studies indicate that individuals have an asymmetric attitude towards gains versus losses. In this paper, we extend the... |
| SourceID | proquest crossref wiley |
| SourceType | Aggregation Database Publisher |
| StartPage | 26 |
| SubjectTerms | Disappointment Risk Tournaments Tournaments & championships Workers |
| Title | Disappointment aversion in tournaments |
| URI | https://onlinelibrary.wiley.com/doi/abs/10.1002%2Fmde.3356 https://www.proquest.com/docview/2610469355/abstract/ |
| Volume | 43 |
| hasFullText | 1 |
| inHoldings | 1 |
| isFullTextHit | |
| isPrint | |
| link | http://utb.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwnV1NS8NAEB2kB_Hit1itEkF6S5tkN5vNUWxLEfQgFgoewu5mA0VMS5t68Nc7u5tYFQSRHHLJQGZ2J_NmePsCcC1xz0qihJ_SQPkUa5ovWBz5eUy04DpUrLBsiwc2ntC7aTytWZXmLIzTh_gcuJnMsN9rk-BCrvob0dDXXPcIiY3attHRM3jocaMcRblDvggHLLuj0Z0Non5j-L0SbeDlV5Bqq8xoD56b93PkkpfeupI99f5DuvF_DuzDbg0-vRu3Ww5gS5eHsN1w34-gO5itxGIxn5WWe-6JNzdN82alV1ljeyDuGCaj4dPt2K9_pOArbECZnyBsUpSFhcL8xpVBSKU4F4rnNCykSHiaSOwzRB4QolOmOEul1EwrKoqcck1OoFXOS30KXhIWeGlqZOUoE0wIonMEDZKmQSSDog1XTVCzhdPLyJwycpShw5lxuA2dJtpZnTGrDDs506oj_GlD14btV_vsfjA097O_PngOO45sbSYnHWhVy7W-QCxRyUu7az4ACmvEgw |
| link.rule.ids | 315,786,790,1382,27957,27958,46329,46753 |
| linkProvider | Wiley-Blackwell |
| linkToHtml | http://utb.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwnV3fS8MwED7mBPXF3-J0agXZW7euSdMUn8RtTN32IBvsQQhJmsIQu-E6H_zrTdLVqSCI9KEvPehd7nrfHXdfAa6E9lmBJHcj7EkX65zmchL4bhwgxalqSpLYaYsB6Y7w_TgYl-C62IXJ-SE-G24mMuz32gS4aUg3VqyhL7GqIxSQNVjX0R7YeupxxR2FaY59NSCw8x0F86znNwrJ77loBTC_wlSbZzo78FS8YT5e8lxfZKIu33-QN_5ThV3YXuJP5yZ3mD0oqXQfNorx9wOotSZzPptNJ6kdP3f4W95Qcyapk1lhuxN3CKNOe3jbdZf_UnClrkGJG2rkJDFpJlKHuD4cjaokpVzSGDcTwUMahUKXGjz2EFIRkZREQiiiJOZJjKlCR1BOp6k6BidsJvpS2DDLYcIJ50jFGjcIHHm-8JIKXBZWZbOcMoPl5Mg-0wozo3AFqoW52TJo5kwXc6Za1wioAjVrt1_lWb_VNveTvz54AZvdYb_HeneDh1PY8s0Sg22kVKGcvS7UmYYWmTi3LvQBce_Ikg |
| linkToPdf | http://utb.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwnV1LS8NAEB60QvHiW6xWjSC9pU2ym83mKKalvoqIhYKHsLvZQBHTYFMP_np3N4lVQRDJIZcMZGZnMt8MM18AzrnyWY4Es0PsCBurnGYz4nt24iPJqHQFSc20xYgMx_h64k-qqUq9C1PyQ3w23HRkmO-1DvA8SXtL0tCXRHYR8skqrGGCPO3R0cOSOgrTEvoqPGDGO2riWcfr1ZLfU9ESX35FqSbNDDbhqX7BcrrkubsoeFe8_-Bu_J8GW7BRoU_ronSXbViR2Q406-H3XehE0znL89k0M8PnFnsr22nWNLMKI2w24vZgPOg_Xg7t6k8KtlAVKLEDhZsEJm4qVICro1GYSlDKBE2wm3IW0DDgqtBgiYOQDImgJORcEikwSxNMJdqHRjbL5AFYgZuqS2LNK4cJI4whmSjUwHHoeNxJW3BWGzXOS8KMuKRG9mKlcKwVbkG7tnZchcw8VqWcrtUV_mlBx5jtV_n4Lurr--FfHzyF5n00iG-vRjdHsO7pDQbTRWlDo3hdyGOFKwp-YhzoA0sFx0E |
| openUrl | ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF-8&rfr_id=info%3Asid%2Fsummon.serialssolutions.com&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.atitle=Disappointment+aversion+in+tournaments&rft.jtitle=Managerial+and+decision+economics&rft.au=Wu%2C+Yaoyao&rft.date=2022-01-01&rft.pub=Wiley+Periodicals+Inc&rft.issn=0143-6570&rft.eissn=1099-1468&rft.volume=43&rft.issue=1&rft.spage=26&rft.epage=30&rft_id=info:doi/10.1002%2Fmde.3356&rft.externalDBID=HAS_PDF_LINK |
| thumbnail_l | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/lc.gif&issn=0143-6570&client=summon |
| thumbnail_m | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/mc.gif&issn=0143-6570&client=summon |
| thumbnail_s | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/sc.gif&issn=0143-6570&client=summon |