Competing on the Holodeck: The Effect of Virtual Peers and Heterogeneity in Dynamic Tournaments

38 Pages Posted: 19 Nov 2018

See all articles by Frederik Graff

Frederik Graff

RWTH Aachen University

Christian Grund

RWTH Aachen University - School of Economics and Business Administration; IZA Institute of Labor Economics

Christine Harbring

University of Cologne; IZA Institute of Labor Economics

Abstract

We propose experiments in virtual reality (VR) as a new approach to examining behavior in an economic context, e.g., heterogeneity in dynamic tournaments. We simulate a realistic working situation in a highly immersive environment. Implementing a tournament in VR, we are able to mitigate the reflection problem, which usually undermines research on dynamic interaction. Moreover, VR allows us to ceteris paribus control for the performance of the virtual peer (humanoid avatar), and thus to get an understanding of the reaction of the subject to the avatar in a really dynamic setting, as the subject is constantly able to observe the avatar's performance.Based on a first experimental phase, we match our subjects with an avatar yielding a specific output. We observe that the subjects' performance is highest in a homogeneous tournament, i.e., when they compete against an avatar achieving the same output as they did in the preceding phase. Interestingly, these results are particularly driven by peer effects rather than by tournament incentives. We extensively track the behavior of subjects and the particular situation and, e.g., examine the role of intermediate score differences and the degree of the subjects' movements.

Keywords: reflection problem, tournament, peer effects, real effort, virtual reality, avatar, heterogeneity

JEL Classification: C91, D9, J33, M52

Suggested Citation

Graff, Frederik and Grund, Christian and Harbring, Christine, Competing on the Holodeck: The Effect of Virtual Peers and Heterogeneity in Dynamic Tournaments. IZA Discussion Paper No. 11919. Available at SSRN: https://ssrn.com/abstract=3286179

Frederik Graff (Contact Author)

RWTH Aachen University

Templergraben 55
52056 Aachen, 52056
Germany

Christian Grund

RWTH Aachen University - School of Economics and Business Administration ( email )

Aachen
Germany

IZA Institute of Labor Economics

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

Christine Harbring

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany
+ 49 (0) 221 / 470 - 7955 (Phone)

IZA Institute of Labor Economics

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

Register to save articles to
your library

Register

Paper statistics

Downloads
16
Abstract Views
87
PlumX Metrics