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Contests at the workplace with and without prize selection: Testing theory in a field experiment

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  • Hakimov, Rustamdjan

Abstract

We conduct a field experiment with 302 workers of the microcredit company in Russia to study the effects of the different designs of a contest for monetary prizes at the workplace. We consider a standard all-pay auction design with two and four prizes of different size and compare it to "parallel" contests with the same prizes, but where participants have to choose the prize prior to the start of the competition and then the winner is selected only among the players who chose the same prize. Despite the theoretical predictions, the parallel contests lead to higher efforts for all players, but mainly by lower-ability players. Division of prizes leads to the predicted effects. In parallel contests, too many players choose the higher prize than equilibrium suggests. Overall, the parallel version of contests appeared to be more profitable for the firm.

Suggested Citation

  • Hakimov, Rustamdjan, 2016. "Contests at the workplace with and without prize selection: Testing theory in a field experiment," Discussion Papers, Research Unit: Market Behavior SP II 2016-211, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzbmbh:spii2016211
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    References listed on IDEAS

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    1. DavidJ. Cooper & Hanming Fang, 2008. "Understanding Overbidding In Second Price Auctions: An Experimental Study," Economic Journal, Royal Economic Society, vol. 118(532), pages 1572-1595, October.
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    3. Hafalir, Isa E. & Hakimov, Rustamdjan & Kübler, Dorothea & Kurino, Morimitsu, 2018. "College admissions with entrance exams: Centralized versus decentralized," Journal of Economic Theory, Elsevier, vol. 176(C), pages 886-934.
    4. Cason, Timothy N. & Masters, William A. & Sheremeta, Roman M., 2010. "Entry into winner-take-all and proportional-prize contests: An experimental study," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 604-611, October.
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    Cited by:

    1. Hafalir, Isa E. & Hakimov, Rustamdjan & Kübler, Dorothea & Kurino, Morimitsu, 2018. "College admissions with entrance exams: Centralized versus decentralized," Journal of Economic Theory, Elsevier, vol. 176(C), pages 886-934.

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    More about this item

    Keywords

    contests; incomplete information; all-pay auctions; field experiment;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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