Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/193213 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11919
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We propose experiments in virtual reality (VR) as a new approach to examining behavior in an economic context, e.g., heterogeneity in dynamic tournaments. We simulate a realistic working situation in a highly immersive environment. Implementing a tournament in VR, we are able to mitigate the reflection problem, which usually undermines research on dynamic interaction. Moreover, VR allows us to ceteris paribus control for the performance of the virtual peer (humanoid avatar), and thus to get an understanding of the reaction of the subject to the avatar in a really dynamic setting, as the subject is constantly able to observe the avatar's performance. Based on a first experimental phase, we match our subjects with an avatar yielding a specific output. We observe that the subjects' performance is highest in a homogeneous tournament, i.e., when they compete against an avatar achieving the same output as they did in the preceding phase. Interestingly, these results are particularly driven by peer effects rather than by tournament incentives. We extensively track the behavior of subjects and the particular situation and, e.g., examine the role of intermediate score differences and the degree of the subjects' movements.
Subjects: 
reflection problem
tournament
peer effects
real effort
virtual reality
avatar
heterogeneity
JEL: 
C91
D9
J33
M52
Document Type: 
Working Paper

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