Department of Economics and Business - Universitat Pompeu Fabra

Title:: Know when to fold 'em: The grit factor
Authors:: Larbi Alaoui and Christian Fons-Rosen
Date:: April 2016 (Revised: April 2021)
Abstract:: This paper investigates the way different sides of grit inflence behavior. In addition to grit's upside in achieving economic success associated with not giving up, it might also have a downside associated with not letting go. We split grit into two new categories, tenacity and diligence, and hypothesize that tenacity can lead individuals to go beyond their own intended plan of action when making a loss. We test the predictions with an experiment that elicits each individual's plan of action which we compare to actual choice in a game of luck. Consistent with our priors, grittier individuals have a higher tendency to overplay, and tenacity alone captures the difficulty in respecting ex-ante preferences when this means accepting defeat. We then discuss the external validity of our findings.
Keywords:: noncognitive skills; grit; tenacity; diligence.
JEL codes:: C91; D03; I20
Area of Research:: Behavioral and Experimental Economics / Business Economics and Industrial Organization / Microeconomics / Labour, Public, Development and Health Economics
Published in:: European Economic Review, 2021,103736, ISSN 0014-2921
Comment:: https://doi.org/10.1016/j.euroecorev.2021.103736

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