Conditioning the effect of prize on tournament self-selection

Abstract

This study examines how past performance moderates the effect of the size of the prize on tournament self-selection. We identify two types of trajectories that play simultaneous and unique roles in moderating the influence of prize on an agent’s decision to enter a tournament: within-period trajectory, which reflects an agent’s short-term performance streak in the tournaments recently entered, and across-period trajectory, which reflects an agent’s long-term performance streak in the same tournament across different periods. We find that positive (negative) within-period and across-period trajectories strengthen (weaken) the positive effect of the size of the prize on tournament entry. Although both performance trajectories have a significant and sizable influence, we find that within-period trajectory plays the strongest moderating effect. We draw on the representativeness heuristic and the availability heuristic to explain our findings. We study these notions using 54,915 self-selection decisions that professional golfers have taken over a ten-year period (1996–2006) when entering PGA Tour tournaments. We draw implications for the craft of contest design.