16,977 research outputs found
Knowing the gap - intermediate information in tournaments
Intermediate information is often available to competitors in dynamic tournaments.
We develop two simple tournament models with two stages: one with intermediate information
on subjectsā relative positions after the first stage, one without. In our
models, equilibrium behavior in both stages is not changed by intermediate information.
We test our formal analysis using data from laboratory experiments. We find no
difference between average first and second stage efforts. With intermediate information,
however, subjects adjust their effort to a higher extent. Subjects who lead tend
to lower their second stage effort, subjects who lag still try to win the tournament.
Overall, intermediate information does not endanger the effectiveness of rank-order
tournaments: incentives do neither break down nor does a rat race arise. We also
briefly investigate costly intermediate information
Multi-Period Rent-Seeking Contests with Carryover: Theory and Experimental Evidence
The majority of theoretical and experimental research stemming from Tullockās (1980) model of rent-seeking considers static, single-period contests. This paper contributes to a growing body of research on multi-period rent-seeking contests by developing and experimentally testing a model in which a playerās effort affects the probability of winning a contest in both the current and future periods. Theory predicts that rent-seeking effort will be shifted forward from later to earlier periods, with no change in overall rent-seeking expenditures relative to the static contest. Experimental results indicate a significant shift forward when ācarryoverā is present and that the amount shifted is directly related to the carryover rate. Finally, although experimental expenditures are greater than the equilibrium predictions, overall rent-seeking effort in the carryover contests is lower than in similar static contests.
Endogenous group formation in experimental contests
We study endogenous group formation in tournaments employing experimental three-player contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending effort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower effort. Anticipation of this exploitation may explain their preference to stand alone
Dynamic contests
Considering several main types of dynamic contests (the race, the tug-of-war, elimination contests and iterated incumbency fights) we identify a common pattern: the discouragement effect. This effect explains why the sum of rentseeking efforts often falls considerably short of the prize that is at stake. It may cause violent conflict in early rounds, but may also lead to long periods of peaceful interaction. -- Unter BerĆ¼cksichtigung verschiedener Haupttypen dynamischer Wettbewerbe (das Wettrennen, das Tauziehen, AusscheidungskƤmpfe und wiederholte KƤmpfe um Amtszeiten) identifizieren die Autoren ein gemeinsames Muster: den Entmutigungseffekt. Dieser Effekt erklƤrt, wieso die Rent-seeking-BemĆ¼hungen in Summe oft deutlich nicht an den auf dem Spiel stehenden Preis heranreichen. Der Effekt kann heftige KƤmpfe in den ersten Runden des Wettbewerbs auslƶsen, aber auch zu langen Perioden friedlichen Zusammenspiels fĆ¼hren.
Best-of-Three Contests: Experimental Evidence
We conduct an experimental analysis of a best-of-three Tullock contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The patterns of players? efforts and the probability that a contest ends in two rounds is consistent with āstrategic momentum?, i.e. momentum generated due to strategic incentives inherent in the contest. We do not find evidence for āpsychological momentum?, i.e. momentum which emerges when winning affects players? confidence. Similar to previous studies of contests, we find significantly higher efforts than predicted and strong heterogeneity in effort between subjects.best-of-three contest, experiments, strategic momentum, psychological momentum
In Litigation: How Far do the āHavesā Come Out Ahead
This paper studies the consequences of asymmetric litigation costs. Under three differ- ent protocols: static legal process, dynamic legal process with exogenous sequencing and dynamic legal process with endogenous sequencing, solutions are obtained for the litigation efforts and the expected value of lawsuits on each side. Outcomes are evaluated in terms of two normative criteria: achieving `justice' and minimizing aggregate litigation cost. The theory implies that a moderate degree of asymmetry may improve access to justice. The dynamics of legal process may accentuate or diminish the effect of asymmetry. The en- dogenous sequencing protocol minimizes cost and may improve access to justice.access to justice;endogenous sequencing;dynamics of litigation process;re- source dissipation.
Sabotage in Contests: A Survey
A contest is a situation in which individuals expend irretrievable resources to win valuable prize(s). āSabotageā is a deliberate and costly act of damaging a rivalās' likelihood of winning the contest. Sabotage can be observed in, e.g., sports, war, promotion tournaments, political or marketing campaigns. In this article, we provide a model and various perspectives on such sabotage activities and review the economics literature analyzing the act of sabotage in contests. We discuss the theories and evidence highlighting the means of sabotage, why sabotage occurs, and the effects of sabotage on individual players and on overall welfare, along with possible mechanisms to reduce sabotage. We note that most sabotage activities are aimed at the ablest player, the possibility of sabotage reduces productive effort exerted by the players, and sabotage may lessen the effectiveness of public policies, such as affirmative action, or information revelation in contests. We discuss various policies that a designer may employ to counteract sabotage activities. We conclude by pointing out some areas of future research
In Litigation: How Far do the "Haves" Come Out Ahead?
This paper studies the consequences of asymmetric litigation costs. Under three differ- ent protocols: static legal process, dynamic legal process with exogenous sequencing and dynamic legal process with endogenous sequencing, solutions are obtained for the litigation efforts and the expected value of lawsuits on each side. Outcomes are evaluated in terms of two normative criteria: achieving `justice' and minimizing aggregate litigation cost. The theory implies that a moderate degree of asymmetry may improve access to justice. The dynamics of legal process may accentuate or diminish the effect of asymmetry. The en- dogenous sequencing protocol minimizes cost and may improve access to justice.access to justice;endogenous sequencing;dynamics of litigation process;re- source dissipation
Iterated dominance and iterated best response in experimental "p-beauty contests"
Picture a thin country 1000 miles long, running north and south, like Chile. Several natural attractions are located at the northern tip of the country. Suppose each of n resort developers plans to locate a resort somewhere on the country's coast (and all spots are equally attractive). After all the resort locations are chosen, an airport will be built to serve tourists, at the average of all the locations including the natural attractions. Suppose most tourists visit all the resorts equally often, except for lazy tourists who visit only the resort closest to the airport; so the developer who locates closest to the airport gets a fixed bonus of extra visitors. Where should the developer locate to be nearest to the airport? The surprising game-theoretic answer is that all the developers should locate exactly where the natural attractions are. This answer requires at least one natural attraction at the northern tip, but does not depend on the fraction of lazy tourists or the number of developers (as long as there is more than one)
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