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Best-of-three contest experiments: Strategic versus psychological momentum

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  • Mago, Shakun D.
  • Sheremeta, Roman M.
  • Yates, Andrew

Abstract

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 the contest ending in two rounds. The patterns of players' efforts and the probability that a contest ends in two rounds are consistent with ‘strategic momentum’, i.e., a momentum generated due to strategic incentives inherent in the contest. We do not find evidence for ‘psychological momentum’, i.e., a momentum which emerges when winning affects players' confidence. Similar to the previous studies of contests, we find significantly higher efforts than predicted and strong heterogeneity in effort between the subjects.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 31 (2013)
Issue (Month): 3 ()
Pages: 287-296

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Handle: RePEc:eee:indorg:v:31:y:2013:i:3:p:287-296

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Web page: http://www.elsevier.com/locate/inca/505551

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Keywords: Best-of-three contest; Experiments; Strategic momentum; Psychological momentum;

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References

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Cited by:
  1. Kimbrough, Erik & Sheremeta, Roman, 2014. "Why can’t we be friends? Entitlements and the costs of conflict," MPRA Paper 53253, University Library of Munich, Germany.
  2. Mago, Shakun & Samak, Anya & Sheremeta, Roman, 2013. "Facing Your Opponents: Social Identification and Information Feedback in Contests," MPRA Paper 47029, University Library of Munich, Germany.
  3. Robert Shupp & Roman M. Sheremeta & David Schmidt & James Walker, 2013. "Resource Allocation Contests: Experimental Evidence," Working Papers 13-23, Chapman University, Economic Science Institute.
  4. Roman M. Sheremeta, 2013. "Overbidding and Heterogeneous Behavior in Contest Experiments," Working Papers 13-06, Chapman University, Economic Science Institute.
  5. Qiang Fu & Changxia Ke & Fangfang Tan, 2013. ""Success breeds success" or "Pride goes before a fall"? Teams and Individuals in Best-of-Three Contests," Working Papers tax-mpg-rps-2013-06, Max Planck Institute for Tax Law and Public Finance.

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