Heterogeneity in Rent-Seeking Contests with Multiple Stages: Theory and Experimental Evidence
AbstractThis paper investigates how heterogeneity in contestants' investment costs affects the competition intensity in a dynamic elimination contest. Theory predicts that the absolute level of investment costs has no effect on the competition intensity in homogeneous interactions. Relative cost differences in heterogeneous interactions, however, reduce equilibrium expenditures. Evidence from lab experiments for treatments with homogeneous participants is qualitatively in line with the theoretical prediction. The effect of cost differences on expenditures is positive rather than negative, however, in all heterogeneous treatments.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2013-29.
Length: 52 pages
Date of creation: Oct 2013
Date of revision:
Contact details of provider:
Postal: Universitätsstraße 15, A - 6020 Innsbruck
Web page: http://www.uibk.ac.at/fakultaeten/volkswirtschaft_und_statistik/index.html.en
More information through EDIRC
Multi-Stage Contest; Heterogeneity; Experiment; Joy of Winning;
Other versions of this item:
- Tanja Hörtnagl & Rudolf Kerschbamer & Rudi Stracke & Uwe Sunde, 2013. "Heterogeneity in Rent-Seeking Contests with Multiple Stages: Theory and Experimental Evidence," CESifo Working Paper Series 4435, CESifo Group Munich.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Schotter, Andrew & Weigelt, Keith, 1990.
"Asymmetric Tournaments, Equal Opportunity Laws And Affirmative Action: Some Experimental Result,"
90-14, C.V. Starr Center for Applied Economics, New York University.
- Schotter, Andrew & Weigelt, Keith, 1992. "Asymmetric Tournaments, Equal Opportunity Laws, and Affirmative Action: Some Experimental Results," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 511-39, May.
- Bull, Clive & Schotter, Andrew & Weigelt, Keith, 1987. "Asymmetric Tournaments, Equal Opportunity Laws and Affirmative Action: Some Experimental Results," Working Papers 87-33, C.V. Starr Center for Applied Economics, New York University.
- Altmann, Steffen & Falk, Armin & Wibral, Matthias, 2008.
"Promotions and Incentives: The Case of Multi-Stage Elimination Tournaments,"
IZA Discussion Papers
3835, Institute for the Study of Labor (IZA).
- Steffen Altmann & Armin Falk & Matthias Wibral, 2012. "Promotions and Incentives: The Case of Multistage Elimination Tournaments," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 149 - 174.
- Erik O. Kimbrough & Roman M. Sheremeta & Timothy Shields, 2011. "Resolving Conflicts by a Random Device," Working Papers 11-09, Chapman University, Economic Science Institute.
- J. Atsu Amegashie & C. Bram Cadsby & Yang Song, 2005.
"Competitive Burnout: Theory and Experimental Evidence,"
0507, University of Guelph, Department of Economics and Finance.
- Amegashie, J. Atsu & Cadsby, C. Bram & Song, Yang, 2007. "Competitive burnout: Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 59(2), pages 213-239, May.
- Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2012.
"A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments,"
12-22, Chapman University, Economic Science Institute.
- Dechenaux, Emmanuel & Kovenock, Dan & Sheremeta, Roman M., 2012. "A survey of experimental research on contests, all-pay auctions and tournaments," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2012-109, Social Science Research Center Berlin (WZB).
- Bull, Clive & Schotter, Andrew & Weigelt, Keith, 1985.
"Tournaments and Piece Rates: An Experimental Study,"
85-21, C.V. Starr Center for Applied Economics, New York University.
- Bull, Clive & Schotter, Andrew & Weigelt, Keith, 1987. "Tournaments and Piece Rates: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 1-33, February.
- Rick Harbaugh & Tilman Klumpp, 2005.
"Early Round Upsets and Championship Blowouts,"
Western Economic Association International, vol. 43(2), pages 316-329, April.
- Stracke, Rudi & Höchtl, Wolfgang & Kerschbamer, Rudolf & Sunde, Uwe, 2013.
"Optimal Prizes in Dynamic Elimination Contests: An Experimental Analysis,"
Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order
79883, Verein für Socialpolitik / German Economic Association.
- Stracke, Rudi & Höchtl, Wolfgang & Kerschbamer, Rudolf & Sunde, Uwe, 2012. "Optimal Prizes in Dynamic Elimination Contests: An Experimental Analysis," Economics Working Paper Series 1208, University of St. Gallen, School of Economics and Political Science.
- Höchtl, Wolfgang & Kerschbamer, Rudolf & Stracke, Rudi & Sunde, Uwe, 2011. "Incentives vs. Selection in Promotion Tournaments: Can a Designer Kill Two Birds with One Stone?," IZA Discussion Papers 5755, Institute for the Study of Labor (IZA).
- Hua Chen & Sung H. Ham & Noah Lim, 2011. "Designing Multiperson Tournaments with Asymmetric Contestants: An Experimental Study," Management Science, INFORMS, vol. 57(5), pages 864-883, May.
- Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
- Rosen, Sherwin, 1986.
"Prizes and Incentives in Elimination Tournaments,"
American Economic Review,
American Economic Association, vol. 76(4), pages 701-15, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janette Walde).
If references are entirely missing, you can add them using this form.