Doing Your Best When Stakes are High? Theory and Experimental Evidence

42 Pages Posted: 24 Feb 2016

See all articles by Nicolas Houy

Nicolas Houy

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Jean Philippe Nicolai

ETH Zürich

Marie Claire Villeval

Groupe d'Analyse et de Théorie Economique (GATE), CNRS; IZA Institute of Labor Economics

Multiple version iconThere are 4 versions of this paper

Date Written: February 23, 2016

Abstract

Achieving an ambitious goal frequently requires succeeding in a sequence of intermediary tasks, some being critical for the final outcome, and others not. Individuals are not always able to provide a level of effort sufficient to guarantee success in all the intermediary tasks. The ability to manage effort throughout the sequence of tasks is therefore critical. In this paper we propose a criterion that defines the importance of a task and that identifies how an individual should optimally allocate a limited stock of exhaustible efforts over tasks. We test this importance criterion in a laboratory experiment that reproduces the main features of a tennis match. We show that our importance criterion is able to predict the individuals’ performance and it outperforms the Morris importance criterion that defines the importance of a point in terms of its impact on the probability to achieve the final outcome. We also find no evidence of choking under pressure and stress, as proxied by electrophysiological measures.

Keywords: C ritical ability, choking under pressure, Morris-importance, Skin Conductance Responses, experiment

JEL Classification: C72, C92, D81

Suggested Citation

Houy, Nicolas and Nicolai, Jean Philippe and Villeval, Marie Claire, Doing Your Best When Stakes are High? Theory and Experimental Evidence (February 23, 2016). Available at SSRN: https://ssrn.com/abstract=2736906 or http://dx.doi.org/10.2139/ssrn.2736906

Nicolas Houy (Contact Author)

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

Jean Philippe Nicolai

ETH Zürich ( email )

Zürichbergstrasse 18
8092 Zurich, CH-1015
Switzerland

Marie Claire Villeval

Groupe d'Analyse et de Théorie Economique (GATE), CNRS ( email )

93, chemin des Mouilles
Ecully, 69130
France
+33 472 86 60 79 (Phone)
+33 472 86 60 90 (Fax)

HOME PAGE: http://www.gate.cnrs.fr/equipe/perso/villeval/villeval.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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