Last Place Aversion

As the world become more intertwined and complicated, competitions inevitably exist in almost every aspect of life. From the fear of being picked last in a gym class to the fear of being the last person to get a promotion at your firm, it seems to be inherit as a human being to dislike sitting in the last place. Kuziemko et al’s “Last-Place Aversion: Evidence and redistributive implications” suggests that people are generally last place averse and would more likely to gamble as long as there is a potential chance to move up in ranking or not being in the last place. By exploring the internal and external validity of the in-lab experiments, we can better examine how plausible the hypothesis of last place aversion is in real life. Similar to most experiments in a lab setting, the experimenters emphasized on the “randomness” of the subject and the treatment. This is an important qualifier for an internally valid experiment because random assignment helps to “distribute the idiosyncratic characteristics of participants over the treatment levels so that they do not selectively bias the outcome of the experiment” (Montgomery, 199, p. 24). Moreover, the error effects can also be reduced to minimal when randomization is implemented. The experimenters have done so by seating participants in different rows …show more content…
It is safe to infer that students from Harvard Business School are more sophisticated, educated, and well off financially than students from other colleges or people employed in workforce. The insignificant amount of the payoff may cause the students to have less incentive in making honest and truthful decisions. If students were to make choices based on strategy and how they think other players are going to play the game, competitive effect where people strive for the highest payoff may take over instead of focusing on last place aversion