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Contests within and between groups: Theory and experiment

Author

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  • Bhattacharya, Puja
  • Rampal, Jeevant

Abstract

We examine behavior in a two-stage group contest where intra-group contests are followed by an inter-group contest. Rewards accrue to the winning group, with winners of the intra-group contest within that group receiving a greater reward. The model generates a discouragement effect, where losers from the first stage exert less effort in the second stage than winners. In contrast to the related literature, we show that a prior win may be disadvantageous, generating lower profits for first stage winners as compared to losers. We consider exogenous asymmetry between groups arising from a biased group contest success function. Although the asymmetry occurs in the second stage, its effect plays out in the first stage, with higher intra-group conflict in the advantaged group. Experimental results support the qualitative predictions of the model. However, losers from the first stage bear a higher burden of the group contribution than the theoretical prediction.

Suggested Citation

  • Bhattacharya, Puja & Rampal, Jeevant, 2024. "Contests within and between groups: Theory and experiment," Games and Economic Behavior, Elsevier, vol. 145(C), pages 467-492.
  • Handle: RePEc:eee:gamebe:v:145:y:2024:i:c:p:467-492
    DOI: 10.1016/j.geb.2024.03.017
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    More about this item

    Keywords

    Contests; Group behavior; Collective action; Asymmetry;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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