Reference Points, Risk-Taking Behavior, and Competitive Outcomes in Sequential Settings

TL;DR

This paper investigates how competitive pressure influences risk-taking and performance in sequential bench press competitions, revealing heterogeneous effects based on individual characteristics and counterfactual scenarios.

Contribution

It provides empirical evidence on the impact of competitive pressure on risk behavior and outcomes, highlighting heterogeneity among participants.

Findings

Pressure increases attempted weights on average.

Removing pressure leads to lower weights and success rates for many.

Heterogeneous responses depend on gender, experience, and rivalry history.

Abstract

Understanding how competitive pressure affects risk-taking is crucial in sequential decision-making under uncertainty. This study examines these effects using bench press competition data, where individuals make risk-based choices under pressure. We estimate the impact of pressure on weight selection and success probability. Pressure from rivals increases attempted weights on average, but responses vary by gender, experience, and rivalry history. Counterfactual simulations show that removing pressure leads many lifters to select lower weights and achieve lower success rates, though some benefit. The results reveal substantial heterogeneity in how competition shapes both risk-taking and performance.