Splash with A Teammate: Peer Effects in High-Stakes Tournaments

This paper investigates peer effects among high-skilled individuals in competitive environments with high-stakes incentives. I use data from the Swimming World Championships and study whether having a teammate in the competing group affects individual performance. The identification challenge lies in that the competing group’s composition is endogenous to individual performance. I apply a regression discontinuity design by comparing finalists’ performance when their teammate barely qualified or not qualified for the same finals. Female athletes accompanied by a teammate finished with less time and performed 0.8 to 1.18 ranks better in the finals. Male athletes’ performance is unaffected. The potential mechanisms of enhanced intra-team competition and mitigated psychosocial pressure are discussed and are in line with literature on gender differences.