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Best-of-Three Contest Experiments: Strategic versus Psychological Momentum

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  • Mago, Shakun
  • Sheremeta, Roman
  • Yates, Andrew

Abstract

We conduct an experimental analysis of a best-of-three 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 are 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.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43031.

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Date of creation: 02 Dec 2012
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Handle: RePEc:pra:mprapa:43031

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Keywords: best-of-three contest; experiments; strategic momentum; psychological momentum;

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References

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Citations

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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. Sheremeta, Roman, 2014. "Behavioral Dimensions of Contests," MPRA Paper 57751, University Library of Munich, Germany.
  3. David Schmidt & Robert Shupp & James M. Walker, 2005. "Resource Allocation Contests: Experimental Evidence," Caepr Working Papers, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington 2006-004, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Aug 2006.
  4. Zeynep B. Irfanoglu & Shakun D. Mago & Roman M. Sheremeta, 2014. "The New Hampshire Effect: Behavior in Sequential and Simultaneous Election Contests," Working Papers, Chapman University, Economic Science Institute 14-15, Chapman University, Economic Science Institute.
  5. 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.
  6. Sheremeta, Roman, 2013. "Overbidding and Heterogeneous Behavior in Contest Experiments," MPRA Paper 44124, University Library of Munich, Germany.
  7. 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, Max Planck Institute for Tax Law and Public Finance tax-mpg-rps-2013-06, Max Planck Institute for Tax Law and Public Finance.
  8. Sheremeta, Roman, 2014. "Behavior in Contests," MPRA Paper 57451, University Library of Munich, Germany.

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