Pushing the Limit: The Different Effects of Threshold Proximity and Competitiveness
(with A. Chevalier, F. Feri, and E. Turrini)
In this paper, we investigate how competitiveness and gender differences influence performance under incentivized thresholds in a between-subjects experiment with 100 participants. Subjects first complete a baseline task to establish their initial performance level, then express their preference for competition by choosing between a tournament-based payoff and a piece-rate scheme. Randomly assigned to either a "Near" or "Far" treatment, participants face personalized thresholds: those in the Near group aim for a goal close to their baseline, while the Far group confronts a more distant target. This design isolates the effects of threshold proximity on effort and achievement, revealing how goals interact with individual traits in incentive-driven environments.
The results highlight significant heterogeneity in responses. Men exhibit stronger competitive preferences, being 14 percentage points more likely to opt for tournaments, and they achieve their thresholds at a 22 percentage point higher rate than women, regardless of proximity. Women, however, are more sensitive to threshold distance: their performance improves substantially with nearer goals but declines sharply with farther ones, leading to smaller overall gains relative to baseline. While gender differences in competitiveness are evident, structural estimation shows that the indirect pathway from gender to goal achievement via competitiveness is not statistically significant, suggesting other mechanisms at play.
Ultimately, this study demonstrates that personalized performance goals are not psychologically neutral; they amplify underlying heterogeneity based on traits like gender and competitiveness. In contexts such as firms, tournaments, or selective admissions that rely on goal-based incentives, the effectiveness of such targets depends not only on their calibration but also on the individuals facing them, with implications for designing equitable incentive structures.
The Strategic Use of Decoy Effect in Bargaining
(with F. Feri and A. Gartner)
The decoy effect describes how preferences shift when additional options are introduced, violating standard rational choice. We study whether subjects strategically deploy decoys to manipulate bargaining outcomes. In our experiment, two negotiators bargain over a menu of alternatives, and can insert a dominated option at a small cost. More than one-third of subjects choose to add a decoy.
We study both compromise-creating and attraction decoys, and vary payoff levels of original alternatives. Belief elicitation reveals that compromise-type decoys are chosen instrumentally to move agreement points toward a preferred settlement, while attraction-type decoys are often chosen because they are themselves perceived as acceptable fallback agreements. The contribution is to show that decoys are strategically used, not simply behaviorally reacted to, and that choice architects inside negotiations exploit this channel.
Local Winner's Curse
(with F. Feri and M. Melendez)
We study whether local performance signals distort global probability judgments. In an online experiment, participants receive a random card and are told its rank within a subsample of the deck before deciding whether to invest for a prize awarded only to the five smallest cards in the full deck. Although all participants face identical objective chances, low local ranks induce over-investment in some conditions. Statistical power is limited, but extreme-rank treatments reveal significant distortions among participants whose beliefs lie near the rational benchmark.