Intermediate Information, Loss Aversion, and Effort: Empirical Evidence

12 Pages Posted: 28 Aug 2017

Date Written: October 2017

Abstract

The present article empirically explores the impact of intermediate information on contestants' effort. Data involving substituted soccer players of the German Bundesliga indicate only weak evidence of a negative effect of ex ante heterogeneity on effort; in contrast, intermediate information, measured by goal difference at the time of substitution, significantly affects effort. Players exert the greatest effort when their team is leading by one goal and reduce their effort when it is trailing. When intermediate information suggests the contest is already decided, players from both teams reduce effort. This behavior is in line with loss aversion, such that players weight potential losses more than potential gains and adjust their effort accordingly.

JEL Classification: Z22, J41, M54

Suggested Citation

Schneemann, Sandra and Deutscher, Christian, Intermediate Information, Loss Aversion, and Effort: Empirical Evidence (October 2017). Economic Inquiry, Vol. 55, Issue 4, pp. 1759-1770, 2017, Available at SSRN: https://ssrn.com/abstract=3026739 or http://dx.doi.org/10.1111/ecin.12420

Sandra Schneemann (Contact Author)

Bielefeld University ( email )

Universitätsstraße 25
Bielefeld, NRW 33613
Germany

Christian Deutscher

Bielefeld University ( email )

Universitätsstraße 25
Bielefeld, NRW 33613
Germany

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