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Asymmetric discouragement in asymmetric contests

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  • March, Christoph
  • Sahm, Marco

Abstract

We provide new experimental evidence which suggests an asymmetric discouragement effect in lottery contests with heterogeneous abilities. Compared to a symmetric contest, subjects invest less effort when facing a stronger opponent, but they invest the same when facing a weaker opponent. Our results can be explained by a simple model of disappointment aversion.

Suggested Citation

  • March, Christoph & Sahm, Marco, 2016. "Asymmetric discouragement in asymmetric contests," BERG Working Paper Series 117, Bamberg University, Bamberg Economic Research Group.
    • Handle: RePEc:zbw:bamber:117
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    Cited by:

    1. Wladislaw Mill & Jonathan Stäbler, 2023. "Spite in Litigation," CESifo Working Paper Series 10290, CESifo.
    2. Martin Carolin & Westerhoff Frank, 2019. "Regulating Speculative Housing Markets via Public Housing Construction Programs: Insights from a Heterogeneous Agent Model," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(4), pages 627-660, August.
    3. March, Christoph & Sahm, Marco, 2018. "Contests as selection mechanisms: The impact of risk aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 114-131.
    4. Roberto Dieci & Noemi Schmitt & Frank Westerhoff, 2018. "Steady states, stability and bifurcations in multi-asset market models," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 41(2), pages 357-378, November.
    5. Hommes, Cars & Lustenhouwer, Joep & Mavromatis, Kostas, 2018. "Fiscal consolidations and heterogeneous expectations," Journal of Economic Dynamics and Control, Elsevier, vol. 87(C), pages 173-205.
    6. Christoph March & Marco Sahm, 2021. "Parochial altruism and the absence of the group size paradox in inter-group conflicts," Economics Bulletin, AccessEcon, vol. 41(2), pages 361-373.
    7. Lustenhouwer, Joep & Mavromatis, Kostas, 2017. "Fiscal consolidations and finite planning horizons," BERG Working Paper Series 130, Bamberg University, Bamberg Economic Research Group.
    8. Mundt, Philipp & Oh, Ilfan, 2019. "Asymmetric competition, risk, and return distribution," BERG Working Paper Series 145, Bamberg University, Bamberg Economic Research Group.
    9. Sahm, Marco, 2017. "Risk aversion and prudence in contests," BERG Working Paper Series 120, Bamberg University, Bamberg Economic Research Group.
    10. Christian Deutscher & Marco Sahm & Sandra Schneemann & Hendrik Sonnabend, 2019. "Strategic Investment Decisions in Multi-stage Contests with Heterogeneous Players," CESifo Working Paper Series 7474, CESifo.
    11. Proaño, Christian R. & Lojak, Benjamin, 2020. "Animal spirits, risk premia and monetary policy at the zero lower bound," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 221-233.
    12. March, Christoph & Sahm, Marco, 2017. "Asymmetric discouragement in asymmetric contests," Economics Letters, Elsevier, vol. 151(C), pages 23-27.
    13. Klein, Arnd Heinrich & Schmutzler, Armin, 2021. "Incentives and motivation in dynamic contests," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 194-216.
    14. Hendrik Sonnabend, 2020. "On discouraging environments in team contests: Evidence from top‐level beach volleyball," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(6), pages 986-997, September.
    15. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    16. Hommes, Cars & Lustenhouwer, Joep, 2019. "Managing unanchored, heterogeneous expectations and liquidity traps," Journal of Economic Dynamics and Control, Elsevier, vol. 101(C), pages 1-16.
    17. Sahm, Marco, 2017. "Are sequential round-robin tournaments discriminatory?," BERG Working Paper Series 121, Bamberg University, Bamberg Economic Research Group.
    18. Sahm, Marco, 2016. "Advance-purchase financing of projects with few buyers," BERG Working Paper Series 118, Bamberg University, Bamberg Economic Research Group.

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    More about this item

    Keywords

    Asymmetric Contest; Discouragement Effect; Disappointment Aversion; Laboratory Experiment;
    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

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