How success breeds success

Descamps, A; Ke, C; Page, L

How success breeds success

Descamps, A Ke, C Page, L

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Publisher:: The Econometric Society
Publication Type:: Journal Article
Citation:: Quantitative Economics, 2022, 13, (1), pp. 355-385
Issue Date:: 2022-01-01

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Field	Value	Language
dc.contributor.author	Descamps, A
dc.contributor.author	Ke, C
dc.contributor.author	Page, L https://orcid.org/0000-0002-6020-9733
dc.date.accessioned	2022-03-31T12:00:02Z
dc.date.available	2022-03-31T12:00:02Z
dc.date.issued	2022-01-01
dc.identifier.citation	Quantitative Economics, 2022, 13, (1), pp. 355-385
dc.identifier.issn	1759-7323
dc.identifier.issn	1759-7331
dc.identifier.uri	http://hdl.handle.net/10453/155799
dc.description.abstract	We investigate if, and why, an initial success can trigger a string of successes. Using random variations in success in a real-effort laboratory experiment, we cleanly identify the causal effect of an early success in a competition. We confirm that an early success indeed leads to increased chances of a later success. By alternatively eliminating strategic features of the competition, we turn on and off possible mechanisms driving the effect of an early success. Standard models of dynamic contest predict a strategic effect due to asymmetric incentives between initial winners and losers. Surprisingly, we find no evidence that they can explain the positive effect of winning. Instead, we find that the effect of winning seems driven by an information revelation effect, whereby players update their beliefs about their relative strength after experiencing an initial success.
dc.language	en
dc.publisher	The Econometric Society
dc.relation.ispartof	Quantitative Economics
dc.relation.isbasedon	10.3982/QE1679
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	1403 Econometrics
dc.title	How success breeds success
dc.type	Journal Article
utslib.citation.volume	13
utslib.for	1403 Econometrics
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	open_access	*
dc.date.updated	2022-03-31T12:00:00Z
pubs.issue	1
pubs.publication-status	Published
pubs.volume	13
utslib.citation.issue	1

Abstract:

We investigate if, and why, an initial success can trigger a string of successes. Using random variations in success in a real-effort laboratory experiment, we cleanly identify the causal effect of an early success in a competition. We confirm that an early success indeed leads to increased chances of a later success. By alternatively eliminating strategic features of the competition, we turn on and off possible mechanisms driving the effect of an early success. Standard models of dynamic contest predict a strategic effect due to asymmetric incentives between initial winners and losers. Surprisingly, we find no evidence that they can explain the positive effect of winning. Instead, we find that the effect of winning seems driven by an information revelation effect, whereby players update their beliefs about their relative strength after experiencing an initial success.

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http://hdl.handle.net/10453/155799