Does Relative Poverty Affect Confidence, Willingness to Compete and Performance of Adolescents? Experimental Evidence from India

In this paper we contribute to the literature by examining if confidence, beliefs about competitor, willingness to compete and performance of individuals in a real-effort task are conditioned on the relative economic status of their potential competitor. We conduct our study among 1025 school-going adolescents in India whose relative economic status we ascertain with data on their household consumer durable goods and housing characteristics. Our subjects are paired in a tournament game with others who are lower, higher or similar in economic status or those whose relative economic status is undisclosed. We find that adolescents whose potential competitor is wealthier display lower confidence regarding task performance. Moreover, such individuals display a decrease in task performance regardless of whether or not they choose to compete. Both rich and poor adolescents consider potential competitors from wealth out-groups to be more willing to compete, than those from their wealth in-group. Overall, females have lower relative confidence, are less willing to compete, and their task performance reduces when the potential for competition is introduced