IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

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

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

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.

If 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.

File URL: http://mpra.ub.uni-muenchen.de/43031/1/MPRA_paper_43031.pdf
File Function: original version
Download Restriction: no

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

as
in new window

Length:
Date of creation: 02 Dec 2012
Date of revision:
Handle: RePEc:pra:mprapa:43031
Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Lisa Anderson & Beth Freeborn, 2010. "Erratum to: Varying the intensity of competition in a multiple prize rent seeking experiment," Public Choice, Springer, vol. 143(1), pages 255-256, April.
  2. Klumpp, Tilman & Polborn, Mattias K., 2006. "Primaries and the New Hampshire Effect," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1073-1114, August.
  3. Sheremeta, Roman & Zhang, Jingjing, 2009. "Can Groups Solve the Problem of Over-Bidding in Contests?," MPRA Paper 49885, University Library of Munich, Germany.
  4. Yan Chen & Peter Katuscak & Emre Ozdenoren, 2005. "Why Can’t a Woman Bid More Like a Man?," CERGE-EI Working Papers wp275, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  5. Lisa Anderson & Beth Freeborn, 2010. "Varying the intensity of competition in a multiple prize rent seeking experiment," Public Choice, Springer, vol. 143(1), pages 237-254, April.
  6. Vriend, Nicolaas J., 2000. "An illustration of the essential difference between individual and social learning, and its consequences for computational analyses," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 1-19, January.
  7. Christopher Ferrall & Anthony A. Smith, 1999. "A Sequential Game Model Of Sports Championship Series: Theory And Estimation," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 704-719, November.
  8. Dechenaux, Emmanuel & Kovenock, Dan & Sheremeta, Roman, 2014. "A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments," MPRA Paper 59714, University Library of Munich, Germany.
  9. Cary Deck & Roman M. Sheremeta, 2012. "Fight or Flight?," Journal of Conflict Resolution, Peace Science Society (International), vol. 56(6), pages 1069-1088, December.
  10. Fudenberg, Drew & Gilbert, Richard & Stiglitz, Joseph & Tirole, Jean, 1983. "Preemption, leapfrogging and competition in patent races," European Economic Review, Elsevier, vol. 22(1), pages 3-31, June.
  11. Treich, Nicolas, 2009. "Risk-Aversion and Prudence in Rent-Seeking Games," TSE Working Papers 09-013, Toulouse School of Economics (TSE).
  12. Zizzo, Daniel John, 2002. "Racing with uncertainty: a patent race experiment," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 877-902, June.
  13. Curtis R. Price & Roman M. Sheremeta, 2009. "Endowment Effects in Contests," Working Papers 09-07, Chapman University, Economic Science Institute.
  14. Cason, Timothy N. & Sheremeta, Roman M. & Zhang, Jingjing, 2012. "Communication and efficiency in competitive coordination games," Games and Economic Behavior, Elsevier, vol. 76(1), pages 26-43.
  15. Richard B. Freeman & Alexander M. Gelber, 2010. "Prize Structure and Information in Tournaments: Experimental Evidence," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 149-64, January.
  16. Konrad, Kai A. & Kovenock, Dan, 2009. "Multi-battle contests," Games and Economic Behavior, Elsevier, vol. 66(1), pages 256-274, May.
  17. Sheremeta, Roman, 2013. "Overbidding and Heterogeneous Behavior in Contest Experiments," MPRA Paper 44124, University Library of Munich, Germany.
  18. Shakun D. Mago & Roman M. Sheremeta, 2012. "Multi-Battle Contests: An Experimental Study," Working Papers 12-06, Chapman University, Economic Science Institute.
  19. Roman M. Sheremeta, 2009. "Experimental Comparison of Multi-Stage and One-Stage Contests," Working Papers 09-04, Chapman University, Economic Science Institute.
  20. Erik O. Kimbrough & Roman M. Sheremeta, 2012. "Side-Payments and the Costs of Conflict," Working Papers 12-01, Chapman University, Economic Science Institute.
  21. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  22. Eyal Baharad & Shmuel Nitzan, 2008. "Contest Efforts in Light of Behavioural Considerations," Economic Journal, Royal Economic Society, vol. 118(533), pages 2047-2059, November.
  23. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 921-55, November.
  24. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 881-919, November.
  25. Roman M. Sheremeta, 2010. "Expenditures and Information Disclosure in Two-Stage Political Contests," Journal of Conflict Resolution, Peace Science Society (International), vol. 54(5), pages 771-798, October.
  26. Shakun D. Mago & Anya C. Savikhin & Roman M. Sheremeta, 2012. "Facing Your Opponents: Social identification and information feedback in contests," Working Papers 12-15, Chapman University, Economic Science Institute.
  27. David Bullock & E. Rutström, 2007. "Policy making and rent-dissipation: An experimental test," Experimental Economics, Springer, vol. 10(1), pages 21-36, March.
  28. Thomas Riechmann, 2007. "An analysis of rent-seeking games with relative-payoff maximizers," Public Choice, Springer, vol. 133(1), pages 147-155, October.
  29. John Cadigan & Pamela Schmitt & Kurtis Swope & Robert Shupp, 2004. "Multi-Period Rent-Seeking Contests with Carryover: Theory and Experimental Evidence," Departmental Working Papers 5, United States Naval Academy Department of Economics.
  30. Potters, Jan & de Vries, Casper G. & van Winden, Frans, 1998. "An experimental examination of rational rent-seeking," European Journal of Political Economy, Elsevier, vol. 14(4), pages 783-800, November.
  31. Hillman, Arye L & Katz, Eliakim, 1984. "Risk-Averse Rent Seekers and the Social Cost of Monopoly Power," Economic Journal, Royal Economic Society, vol. 94(373), pages 104-10, March.
  32. Sheremeta, Roman, 2009. "Contest Design: An Experimental Investigation," MPRA Paper 52101, University Library of Munich, Germany.
  33. Edward Millner & Michael Pratt, 1989. "An experimental investigation of efficient rent-seeking," Public Choice, Springer, vol. 62(2), pages 139-151, August.
  34. Cason, Timothy & Masters, William & Sheremeta, Roman, 2010. "Entry into Winner-Take-All and Proportional-Prize Contests: An Experimental Study," MPRA Paper 49886, University Library of Munich, Germany.
  35. Anderson, Lisa R & Stafford, Sarah L, 2003. " An Experimental Analysis of Rent Seeking under Varying Competitive Conditions," Public Choice, Springer, vol. 115(1-2), pages 199-216, April.
  36. Davis, Douglas D & Reilly, Robert J, 1998. " Do Too Many Cooks Always Spoil the Stew? An Experimental Analysis of Rent-Seeking and the Role of a Strategic Buyer," Public Choice, Springer, vol. 95(1-2), pages 89-115, April.
  37. Arkes, Hal R. & Blumer, Catherine, 1985. "The psychology of sunk cost," Organizational Behavior and Human Decision Processes, Elsevier, vol. 35(1), pages 124-140, February.
  38. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  39. Savikhin, Anya & Sheremeta, Roman, 2012. "Simultaneous Decision-Making in Competitive and Cooperative Environments," MPRA Paper 46809, University Library of Munich, Germany.
  40. Burkhard Hehenkamp & Wolfgang Leininger & Alex Possajennikov, 2003. "Evolutionary Equilibrium in Tullock Contests: Spite and Overdissipation," Discussion Papers in Economics 03_01, University of Dortmund, Department of Economics.
  41. McKee, Michael, 1989. "Intra-experimental income effects and risk aversion," Economics Letters, Elsevier, vol. 30(2), pages 109-115, August.
  42. Frans van Dijk & Joep Sonnemans & Frans van Winden, 2000. "Incentive Systems in a Real Effort Experiment," CESifo Working Paper Series 272, CESifo Group Munich.
  43. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
  44. Fonseca, Miguel A., 2009. "An experimental investigation of asymmetric contests," International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 582-591, September.
  45. Malueg, David A. & Yates, Andrew J., 2005. "Equilibria and comparative statics in two-player contests," European Journal of Political Economy, Elsevier, vol. 21(3), pages 738-752, September.
  46. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
  47. Millner, Edward L & Pratt, Michael D, 1991. " Risk Aversion and Rent-Seeking: An Extension and Some Experimental Evidence," Public Choice, Springer, vol. 69(1), pages 81-92, February.
  48. Konrad, Kai A & Schlesinger, Harris, 1997. "Risk Aversion in Rent-Seeking and Rent-Augmenting Games," Economic Journal, Royal Economic Society, vol. 107(445), pages 1671-83, November.
  49. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
  50. R. McKelvey & T. Palfrey, 2010. "Quantal Response Equilibria for Normal Form Games," Levine's Working Paper Archive 510, David K. Levine.
  51. Wolfgang Leininger, 2003. "On evolutionarily stable behavior in contests," Economics of Governance, Springer, vol. 4(3), pages 177-186, November.
  52. Ham, John C. & Kagel, John H., 2006. "Gender effects in private value auctions," Economics Letters, Elsevier, vol. 92(3), pages 375-382, September.
  53. Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211.
  54. Curtis R. Price & Roman M. Sheremeta, 2012. "Endowment Origin, Demographic Effects and Individual Preferences in Contests," Working Papers 12-07, Chapman University, Economic Science Institute.
  55. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-34, November.
  56. David A. Malueg & Andrew J. Yates, 2010. "Testing Contest Theory: Evidence from Best-of-Three Tennis Matches," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 689-692, August.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:43031. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.