Effect of social information on competition choice

Banerjee, Ritwik and Gangadharan, Lata and Kumar, Anand and Murali, Srinivasan (2026) Effect of social information on competition choice. Journal of Economic Behavior & Organization, 248. p. 107591. ISSN 01672681

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Abstract

We examine how social information about competition choices influences individuals’ willingness to compete. Participants perform a real-effort task under both piece-rate and tournament incentives, and subsequently make competition choices in two rounds. Between rounds, we exogenously vary the information provided about others’ choices across three treatments. We find that social information about the proportion of participants who chose to compete in the first round significantly affects the willingness to compete in the second round. This effect is not driven by the salience of the incentive schemes. Observing a lower rate of competition among peers increases an individual’s propensity to enter the tournament. This evidence is consistent with predictions from a rational model of Bayesian learning, in which individuals strategically choose to compete based on their treatment-induced belief about the average ability of other participants.

Item Type:	Article
Authors:	Banerjee, Ritwik and Gangadharan, Lata and Kumar, Anand and Murali, Srinivasan
Document Language:	Language English
Subjects:	Social sciences > Economics > Production Social sciences > Economics > Production > Economic policy, economic development, economic growth
Divisions:	Azim Premji University - Bengaluru
Full Text Status:	Public
URI:	http://publications.azimpremjiuniversity.edu.in/id/eprint/7653
Publisher URL:	https://doi.org/10.1016/j.jebo.2026.107591

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