Willingness to Fight on : Environmental Quality in Dynamic Contests

We show that the prevalence of prolonged tennis contests drops sharply when the ambient environment deteriorates through heat or pollution. We develop a multi-battle dynamic model to investigate how the disutility from a protracted competition shapes agents' willingness to fight on. Our theory predicts that a poor environment amplifies the momentum of a competitor's head start. We show how model primitives including preferences for environmental amenities can be inferred from battle-to-battle transition probabilities. We find that heat and pollution affect incentives to compete strategically. In a contest between equally able rivals at the median prize of $15,100, the value of a head start is $130-370 higher in a degraded environment compared with a climate-controlled one