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Indefinitely repeated contests with incumbency advantage

Author

Listed:
  • Cary Deck

    (The University of Alabama)

  • Zachary Dorobiala

    (The University of Alabama)

  • Paan Jindapon

    (The University of Alabama)

Abstract

We study an indefinitely repeated Tullock contest in which the stage-game winner gains an incumbency advantage in the next stage-game. The incumbent’s advantage allows the incumbent to carry over a proportion of their expenditure in the previous contest to the next contest. Theoretically, this advantage is not predicted to have a large impact on total expenditure. However, in a controlled laboratory experiment, we find the incumbency advantage increases total expenditure by a significant amount. Further, we find that carryover has a discouraging effect on challengers while encouraging incumbents react in a retaliatory manner.

Suggested Citation

  • Cary Deck & Zachary Dorobiala & Paan Jindapon, 2024. "Indefinitely repeated contests with incumbency advantage," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 10(2), pages 232-254, December.
    • Handle: RePEc:spr:jesaex:v:10:y:2024:i:2:d:10.1007_s40881-023-00154-2
    DOI: 10.1007/s40881-023-00154-2
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    More about this item

    Keywords

    Infinitely repeated games; Tullock contests; Incumbency advantage; Laboratory experiments;
    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
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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