Forecasts of relative performance in tournaments: evidence from the field

Santos-Pinto, Luís and Park, Young-Joon (2004): Forecasts of relative performance in tournaments: evidence from the field.

Abstract

This paper uses a field experiment to investigate the quality of individuals' forecasts of relative performance in tournaments. We ask players in luck-based (poker) and skill-based (chess) tournaments to make point forecasts of rank. The main finding of the paper is that players' forecasts in both types of tournaments are biased towards overestimation of relative performance. However, the size of the biases found is not as large as the ones often reported in the psychology literature. We also find support for the "unskilled and unaware hypothesis" in chess: high skilled chess players make better forecasts than low skilled chess players. Finally, we find that chess players' forecasts of relative performance are not efficient.

• Item Type: MPRA Paper
• Institution: Universidade Nova de Lisboa
• Language: English
• Keywords: Tournaments; Rationality; Field Experiment
• Subjects: J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Labor Contracts; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments; A - General Economics and Teaching > A1 - General Economics > A12 - Relation of Economics to Other Disciplines

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