Title: Fear of Falling Behind: A Rat Race Game

Speaker: Te Bao, Associate Professor, Nanyang Technological University

Host: Jiang Ming, Associate Professor, Antai College of Economics and Management, Shanghai Jiao Tong University

Time: 10:00–11:30, Monday, November 9, 2026

Venue: Room A511, Antai College of Economics and Management, Xuhui Campus, Shanghai Jiao Tong University

Brief introduction of the content: 

Why are groups trapped in vicious competition that makes everyone worse off? We develop a rat-race game in which participants choose a number, pay a cost that rises with that number, and face an additional penalty if they choose below the middle choice in their group. Choosing a higher number produces nothing of value: everyone would earn most by choosing zero together, but cutting back alone can trigger a penalty. In a 20-round laboratory pilot with 240 participants, most groups first move toward higher numbers, then settle at a state in which a majority chooses zero for the remaining rounds. Higher penalties prolong competition and reduce earnings. Even when a majority chooses zero and penalties disappear, some participants continue spending, creating deadweight loss. The game provides a simple experimental framework for studying how such competition develops and how groups might escape it.

Speaker's profile:

Te Bao is a tenured Associate Professor in the Department of Economics at Nanyang Technological University, Singapore, and serves as Assistant Dean of the Graduate College. His research focuses on behavioral finance, experimental economics, and computational economics. He has published more than 50 papers in leading domestic and international journals, including the Economic Journal, Management Science, Economic Research Journal, and Management World. He is also an Associate Editor or editorial board member of five international journals, including the Journal of Economic Dynamics and Control.

Welcome all!