Disappointment Aversion and Social Comparisons in a Real-Effort Competition

26 Pages Posted: 22 May 2017 Last revised: 26 Apr 2023

See all articles by Simon Gaechter

Simon Gaechter

University of Nottingham; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Lingbo Huang

Nanjing Audit University

Martin Sefton

University of Nottingham - School of Economics

Multiple version iconThere are 2 versions of this paper

Abstract

We present an experiment to investigate the source of disappointment aversion in a sequential real-effort competition. Specifically, we study the contribution of social comparison effects to the disappointment aversion previously identified in a two-person real-effort competition (Gill and Prowse, 2012). To do this we compare "social" and "asocial" versions of the Gill and Prowse experiment, where the latter treatment removes the scope for social comparisons. If disappointment aversion simply reflects an asymmetric evaluation of losses and gains we would expect it to survive in our asocial treatment, while if losing to or winning against another person affects the evaluation of losses/gains we would expect treatment differences. We find behavior in social and asocial treatments to be similar, suggesting that social comparisons have little impact in this setting. Unlike in Gill and Prowse we do not find evidence of disappointment aversion.

Keywords: reference-dependent preferences, disappointment aversion, social comparison effects, real effort competition

JEL Classification: C91, D12, D81, D84

Suggested Citation

Gachter, Simon and Huang, Lingbo and Sefton, Martin, Disappointment Aversion and Social Comparisons in a Real-Effort Competition. IZA Discussion Paper No. 10754, Available at SSRN: https://ssrn.com/abstract=2971350 or http://dx.doi.org/10.2139/ssrn.2971350

Simon Gachter (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

IZA Institute of Labor Economics

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

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Lingbo Huang

Nanjing Audit University ( email )

86 Yushan W Rd
Pukou, Jiangsu 210017
China

Martin Sefton

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
47
Abstract Views
486
PlumX Metrics