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Multi-Battle Contests: An Experimental Study

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Author Info

  • Shakun D. Mago

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

  • Roman M. Sheremeta

    ()
    (Argyros School of Business and Economics, Chapman University)

Abstract

This study examines behavior of subjects in simultaneous and sequential multi-battle contests. In simultaneous contests, subjects make positive bids in each battle 80% of the time and bids fall within the predicted boundaries. However, 35% of the time subjects make positive bids in only two, instead of all three, battles and they significantly overuse moderately high bids. In sequential contests, theory predicts sizable bids in the first battle and no bids in the subsequent battles. Contrary to this prediction, subjects significantly underbid in the first battle and overbid in subsequent battles. Consequently, instead of always ending in the second battle, contest proceeds to the third battle 38% of the time. Finally, in both simultaneous and sequential settings, subjects make higher aggregate bids than predicted resulting in negative expected payoffs.

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Bibliographic Info

Paper provided by Chapman University, Economic Science Institute in its series Working Papers with number 12-06.

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Length: 35 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:chu:wpaper:12-06

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Keywords: multi-battle contest; experiments; risk aversion; overdissipation;

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References

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Citations

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Cited by:
  1. Montero García, Maria & Possajennikow, Alex & Sefton, Martín & Turocy, Theodore L., 2013. "Majoritarian Contests with Asymmetric Battlefields: An Experiment," IKERLANAK Ikerlanak;2013-76, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  2. Mago, Shakun & Sheremeta, Roman & Yates, Andrew, 2012. "Best-of-Three Contest Experiments: Strategic versus Psychological Momentum," MPRA Paper 43031, University Library of Munich, Germany.
  3. Sheremeta, Roman, 2013. "Overbidding and Heterogeneous Behavior in Contest Experiments," MPRA Paper 44124, University Library of Munich, Germany.
  4. Curtis R. Price & Roman M. Sheremeta, 2012. "Endowment Origin, Demographic Effects and Individual Preferences in Contests," Working Papers 12-07, Chapman University, Economic Science Institute.

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