Seminar

Past

Willingness to fight on:Environmental quality in dynamic contests

Alberto Salvo

  • Date15 November 2021
  • Time 11h00 - 12h15
  • Room Online

Abstract

We show that the prevalence of prolonged contests in professional tennis drops sharply when the ambient environment deteriorates through heat or pollution. We develop a dynamic model of multi-battle competition to investigate how the disutility from a protracted competition shapes agents’ willingness to fight on. Our theory predicts that a poor environment amplifies the momentum of a competitor’s headstart. We show how model primitives including preferences for improved working conditions (environmental amenities in our setting) can be inferred from battle-to-battle transition probabilities. We provide clean evidence that heat and pollution affect individuals’ incentives to compete strategically. Model estimates show that in a contest between equally able rivals at the median prize of $15,100, the value of ahead start is $130 to $370 higher in a degraded environment compared with a climate-controlled one.

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