Strategically Equivalent Contests

Using a two-player Tullock-type contest, we show that intuitively and structurally different contests can be strategically equivalent. Strategically equivalent contests generate the same best response functions and, as a result, the same equilibrium efforts. However, strategically equivalent contests may yield different equilibrium payoffs. We propose a simple two-step procedure to identify strategically equivalent contests. Using this procedure, we identify contests that are strategically equivalent to the original Tullock contest, and provide new examples of strategically equivalent contests. Finally, we discuss possible contest design applications and avenues for future theoretical and empirical research

An Experimental Investigation of Colonel Blotto Games

"This article examines behavior in the two-player, constant-sum Colonel Blotto game with asymmetric resources in which players maximize the expected number of battlefields won. The experimental results support all major theoretical predictions. In the auction treatment, where winning a battlefield is deterministic, disadvantaged players use a 'guerilla warfare' strategy which stochastically allocates zero resources to a subset of battlefields. Advantaged players employ a 'stochastic complete coverage' strategy, allocating random, but positive, resource levels across the battlefields. In the lottery treatment, where winning a battlefield is probabilistic, both players divide their resources equally across all battlefields." (author's abstract)"Dieser Artikel untersucht das Verhalten von Individuen in einem 'constant-sum Colonel Blotto'-Spiel zwischen zwei Spielern, bei dem die Spieler mit unterschiedlichen Ressourcen ausgestattet sind und die erwartete Anzahl gewonnener Schlachtfelder maximieren. Die experimentellen Ergebnisse bestätigen alle wichtigen theoretischen Vorhersagen. Im Durchgang, in dem wie in einer Auktion der Sieg in einem Schlachtfeld deterministisch ist, wenden die Spieler, die sich im Nachteil befinden, eine 'Guerillataktik' an, und verteilen ihre Ressourcen stochastisch auf eine Teilmenge der Schlachtfelder. Spieler mit einem Vorteil verwenden eine Strategie der 'stochastischen vollständigen Abdeckung', indem sie zufällig eine positive Ressourcenmenge auf allen Schlachtfeldern positionieren. Im Durchgang, in dem sich der Gewinn eines Schlachtfeldes probabilistisch wie in einer Lotterie bestimmt, teilen beide Spieler ihre Ressourcen gleichmäßig auf alle Schlachtfelder auf." (Autorenreferat

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 „strategic momentum‟, i.e. momentum generated due to strategic incentives inherent in the contest. We do not find evidence for „psychological 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

Experimental Research on Contests

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review of such studies