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Inequality and competitive effort: The roles of asymmetric resources, opportunity and outcomes

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  • Fallucchi, Francesco
  • Ramalingam, Abhijit
  • Rockenbach, Bettina
  • Waligora, Marcin

Abstract

We investigate how individuals react to different types of asymmetries in experimental two-player Tullock contests where contestants expend resources to win a prize. We compare the effects of three different sources of asymmetry: resources, abilities and possible outcomes. We find that overall competitive effort is greatest in the presence of asymmetric abilities. Unlike other forms, asymmetry in abilities elicits a very aggressive reaction from disadvantaged players relative to their advantaged opponents. The Quantal Response Equilibrium (QRE) suggests that financial incentives are less salient in the presence of a biased contest procedure. We explore asymmetric abilities further in a second study that varies the degree of asymmetry. We find that advantaged players exploit their privileged position while disadvantaged players exhibit volatile behavior, either giving up or matching their opponents. We conclude that a desire to win drives behavior in this asymmetric setting.

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  • Fallucchi, Francesco & Ramalingam, Abhijit & Rockenbach, Bettina & Waligora, Marcin, 2021. "Inequality and competitive effort: The roles of asymmetric resources, opportunity and outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 81-96.
    • Handle: RePEc:eee:jeborg:v:185:y:2021:i:c:p:81-96
    DOI: 10.1016/j.jebo.2021.02.013
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    1. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.

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    More about this item

    Keywords

    Rent seeking; Contest; Experiment; Asymmetry; QRE; Desire to win;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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