Anticipatory effects of competition on confidence and risk preference
Year: 2025
Type: article
Abstract: We study anticipatory changes in confidence and risk preference aroused by the prospect of future competition. Participants in our treatment group are told they will later participate in a tournament, while those in the control group are told they will work for a piece rate. Beliefs over relative ability and risk attitudes are measured prior to this prospective task. We find no anticipatory effect on confidence in relative ability, but a significant effect on risk preference. Specifically, the treatment increases risk aversion in males, but not in females, such that the conventional gender difference in risk preference is neutralized. • Confidence and risk preference were compared in groups who expect to engage in competition or not. • There was no anticipatory effect of competition on confidence in one’s own relative ability. • Anticipation of future competition increased risk aversion, specifically in males. • An exogenous shock to confidence had only a minor effect on performance in the competition.
Authors: Stephen L. Cheung, Vindesh Nadan
Institution: The University of Sydney
Language: English
Subfield: Safety Research
Field: Social Sciences
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,830
OpenAlex ID: W4408975236