Better to Have Led and Lost than Never to Have Led at All? Lost Leadership and Effort Provision in Dynamic Tournaments

48 Pages Posted: 1 Mar 2021 Last revised: 24 Apr 2021

See all articles by Cédric Gutierrez

Cédric Gutierrez

Bocconi University - Department of Management and Technology

Tomasz Obloj

HEC Paris - Strategy & Business Policy

Frank Douglas

Analysis Group, Inc.

Date Written: October 14, 2020

Abstract

In this paper, we develop and test a behavioral theory of lost leadership. Using insights from the literature on goals as reference points and prospect theory, we predict that former leaders exert more effort compared to otherwise identical competitors. We test this prediction using two contexts. The first, quasi-laboratory, data comes from an educational business game. The second setting draws on field data from a two-month banking sales contest. We find that provision of effort increases following the loss of leadership. We also explore whether past leaders exert more effort in general or simply shift effort from other, potentially less-salient goals. We find evidence of both mechanisms. Finally, we investigate the temporal effects and find that having been a leader has an attenuating effect on subsequent behavior.

Keywords: behavioral strategy, competitive dynamics, dynamic tournaments, lost leadership, reference points

Suggested Citation

Gutierrez, Cédric and Obloj, Tomasz and Douglas, Frank, Better to Have Led and Lost than Never to Have Led at All? Lost Leadership and Effort Provision in Dynamic Tournaments (October 14, 2020). Strategic Management Journal, Forthcoming, Bocconi University Management Research Paper No. 3795183, HEC Paris Research Paper No. SPE-2021-1414, Available at SSRN: https://ssrn.com/abstract=3795183 or http://dx.doi.org/10.2139/ssrn.3795183

Cédric Gutierrez (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Tomasz Obloj

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Frank Douglas

Analysis Group, Inc. ( email )

111 Huntington Avenue
10th floor
Boston, MA 02199
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
28
Abstract Views
356
PlumX Metrics