We draw an unusually detailed picture of a discovery, the beauty contest game -with Hervé Moulin as the center of the initial inspiration. Since its inception, the beauty contest game and the descriptive level k model has widely contributed to the growth of experimental and behavioral economics and expanded also to other areas within and outside of economics. We illustrate, in particular, the recent interaction between macroeconomic theorists and experimenters, who independently had worked on the puzzles and consequences due to beauty contest features. Furthermore, we introduce a new variety of the twoperson beauty contest game with two different payoff structures that leads to different game-theoretic properties unperceived by naïve subjects and game theory experts alike.

By extending a typical endowment effect experiment with the possibility of winning the endowment in a real effort contest, we found two reinforcing effects that led to a complete market failure. Subjects who won the item in the effortful competition had a very high willingness to accept (trophy winner effect). By contrast, subjects who were not successful had an extremely low willingness to pay for the same item (trophy loser effect). We disentangle different components of these effects and investigate the underlying emotional responses. Further, we analyze the duration of the effects and discuss economic implications.

In order to analyze if heterogeneity in psychological traits affects individual performance in sequential tournaments, we conducted a tennis field experiment. In the experiment, we also varied the payment schemes (individual, team, competition) to control for moderating effects of different incentives. Team incentives, risk taking, and self-esteem reduced performance whereas a preference towards competition enhanced it. On average, we observe a second mover advantage. However, individuals' psychological traits, such as self-esteem or self-efficacy, can turn a second mover into a first mover advantage. Our results shed new light on the discussion of first vs. second mover advantages and performance under pressure. Study findings have implications for psychological requirements of competitive and team tasks in business settings.

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