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Best-of-Three Contests: Experimental Evidence

Author

Listed:
  • Shakun D. Mago

    (Department of Economics, Robins School of Business, University of Richmond)

  • Roman Sheremeta

    (Argyros School of Business and Economics, Chapman University)

  • Andrew Yates

    (Department of Economics, Robins School of Business, University of Richmond)

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 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.

Suggested Citation

  • Shakun D. Mago & Roman Sheremeta & Andrew Yates, 2010. "Best-of-Three Contests: Experimental Evidence," Working Papers 10-24, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:10-24
    as

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    File URL: http://www.chapman.edu/ESI/wp/Sheremeta-The_Best_of_Three.pdf
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    References listed on IDEAS

    as
    1. Dorsey-Palmateer R. & Smith G., 2004. "Bowlers Hot Hands," The American Statistician, American Statistical Association, vol. 58, pages 38-45, February.
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    Citations

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    Cited by:

    1. Chen, Zhuoqiong (Charlie) & Ong, David & Sheremeta, Roman M., 2015. "The gender difference in the value of winning," Economics Letters, Elsevier, vol. 137(C), pages 226-229.
    2. Bayer, Ralph-Christopher, 2016. "Cooperation and distributive conflict," Games and Economic Behavior, Elsevier, vol. 97(C), pages 88-109.
    3. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    4. 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.
    5. Gelder, Alan & Kovenock, Dan, 2017. "Dynamic behavior and player types in majoritarian multi-battle contests," Games and Economic Behavior, Elsevier, vol. 104(C), pages 444-455.
    6. Roman M. Sheremeta, 2013. "Overbidding And Heterogeneous Behavior In Contest Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 491-514, July.
    7. Roman M. Sheremeta, 2014. "Behavioral Dimensions of Contests," Working Papers 14-14, Chapman University, Economic Science Institute.
    8. Shupp, Robert & Sheremeta, Roman M. & Schmidt, David & Walker, James, 2013. "Resource allocation contests: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 257-267.
    9. Deck, Cary & Sheremeta, Roman M., 2019. "The tug-of-war in the laboratory," European Journal of Political Economy, Elsevier, vol. 60(C).
    10. Shakun D. Mago & Roman M. Sheremeta, 2017. "Multi‐battle Contests: An Experimental Study," Southern Economic Journal, John Wiley & Sons, vol. 84(2), pages 407-425, October.
    11. Zeynep B. Irfanoglu & Shakun D. Mago & Roman M. Sheremeta, 2014. "The New Hampshire Effect: Behavior in Sequential and Simultaneous Election Contests," Working Papers 14-15, Chapman University, Economic Science Institute.
    12. Shakun D. Mago & Anya C. Savikhin & Roman M. Sheremeta, 2012. "Facing Your Opponents: Social identification and information feedback in contests," Working Papers 12-15, Chapman University, Economic Science Institute.
    13. Romain Gauriot & Lionel Page, 2019. "Does Success Breed Success? a Quasi-Experiment on Strategic Momentum in Dynamic Contests," The Economic Journal, Royal Economic Society, vol. 129(624), pages 3107-3136.
    14. Alex Krumer, 2013. "Best-of-two contests with psychological effects," Theory and Decision, Springer, vol. 75(1), pages 85-100, July.
    15. (Charlie) Chen, Zhuoqiong & Ong, David & Sheremeta, Roman, 2022. "Competition between and within universities: Theoretical and experimental investigation of group identity and the desire to win," Journal of Economic Psychology, Elsevier, vol. 93(C).
    16. Bradley J. Ruffle & Oscar Volij, 2016. "First-mover advantage in best-of series: an experimental comparison of role-assignment rules," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(4), pages 933-970, November.
    17. Sheremeta, Roman, 2014. "Behavior in Contests," MPRA Paper 57451, University Library of Munich, Germany.
    18. Erik O. Kimbrough & Roman M. Sheremeta, 2012. "Why Can’t We Be Friends? Entitlements, bargaining, and conflict," Working Papers 12-16, Chapman University, Economic Science Institute.

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    More about this item

    Keywords

    best-of-three contest; experiments; strategic momentum; psychological momentum;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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