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Endogenous group formation in experimental contests

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  • Herbst, Luisa
  • Konrad, Kai A.
  • Morath, Florian

Abstract

We study endogenous group formation in tournaments employing experimental threeplayer contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending effort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower effort. Anticipation of this exploitation may explain their preference to stand alone.

Suggested Citation

  • Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2013. "Endogenous group formation in experimental contests," Discussion Papers, Research Unit: Economics of Change SP II 2013-301, Social Science Research Center Berlin (WZB).
  • Handle: RePEc:zbw:wzbeoc:spii2013301
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    Cited by:

    1. De Luca, Giacomo & Sekeris, Petros & Spengler, Dominic, 2015. "Can Violence Harm Cooperation? Experimental Evidence," MPRA Paper 63697, University Library of Munich, Germany.
    2. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    3. Tomas Sjöström & Levent Ülkü & Radovan Vadovic, 2017. "Free to Choose: Testing the Pure Motivation Effect of Autonomous Choice," Carleton Economic Papers 17-11, Carleton University, Department of Economics.
    4. Tor Eriksson & Lei Mao & Marie Claire Villeval, 2017. "Saving face and group identity," Experimental Economics, Springer;Economic Science Association, vol. 20(3), pages 622-647, September.
    5. Metzger, Lars P., 2015. "Alliance Formation in Contests with Incomplete Information," Ruhr Economic Papers 544, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. repec:eee:pubeco:v:152:y:2017:i:c:p:143-153 is not listed on IDEAS
    7. Roman M. Sheremeta, 2015. "Behavior in Group Contests: A Review of Experimental Research," Working Papers 15-21, Chapman University, Economic Science Institute.
    8. repec:zbw:rwirep:0544 is not listed on IDEAS
    9. Herrera, Helios & Reuben, Ernesto & Ting, Michael M., 2017. "Turf wars," Journal of Public Economics, Elsevier, vol. 152(C), pages 143-153.
    10. Lars P. Metzger, 2015. "Alliance Formation in Contests with Incomplete Information," Ruhr Economic Papers 0544, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    11. Kai A. Konrad & Florian Morath, 2015. "To deter or to moderate? Alliance formation in contests with incomplete information," Working Papers tax-mpg-rps-2015-15, Max Planck Institute for Tax Law and Public Finance.
    12. 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..
    13. Luisa Herbst, 2016. "Who Pays to Win Again? The Joy of Winning in Contest Experiments," Working Papers tax-mpg-rps-2016-06, Max Planck Institute for Tax Law and Public Finance.
    14. repec:cai:repdal:redp_273_0307 is not listed on IDEAS
    15. Kai A. Konrad & Florian Morath, 2017. "Escalation in Dynamic Conflict: On Beliefs and Selection," Working Papers tax-mpg-rps-2017-05, Max Planck Institute for Tax Law and Public Finance.

    More about this item

    Keywords

    endogenous group formation; contest; conflict; alliance; experiment; moral hazard problem; free-riding; in-group favoritis;

    JEL classification:

    • 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

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