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Overbidding and heterogeneous behavior in contest experiments: A comment on the endowment effect

Author

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  • Subhasish M. Chowdhury

    (University of East Anglia)

  • Peter G. Moffatt

    (University of East Anglia)

Abstract

We revisit the meta-analysis of Sheremeta (2013) on overbidding in contest experiments and focus on the effect of endowment on overbidding. Whereas Sheremeta (2013) assumes that there is a monotonic relationship between endowment and overbidding in his meta-analysis, Baik et al. (2014) find an inverted-U shaped relationship in the analysis of a single experiment. We use the same data as in Sheremeta (2013), but employ a different econometric model which leads to support for the inverted-U shaped relationship. Following Baik et al. (2014) we explain the result in terms of a wealth effect.

Suggested Citation

  • Subhasish M. Chowdhury & Peter G. Moffatt, 2015. "Overbidding and heterogeneous behavior in contest experiments: A comment on the endowment effect," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 15-17, School of Economics, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:wcbess:15-17
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    1. Kyung Hwan Baik & Subhasish M. Chowdhury & Abhijit Ramalingam, 2014. "Resources for Conflict: Constraint or Wealth?," University of East Anglia Applied and Financial Economics Working Paper Series 061, School of Economics, University of East Anglia, Norwich, UK..
    2. Roman M. Sheremeta, 2013. "Overbidding And Heterogeneous Behavior In Contest Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 491-514, July.
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    Cited by:

    1. Kölle, Felix, 2022. "Governance and competition," European Economic Review, Elsevier, vol. 148(C).
    2. Kyung Hwan Baik & Subhasish M. Chowdhury & Abhijit Ramalingam, 2020. "The effects of conflict budget on the intensity of conflict: an experimental investigation," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 240-258, March.

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    More about this item

    Keywords

    experiments; contests; overbidding; endowment; meta-analysis;
    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

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