Experimental Comparison of Multi-Stage and One-Stage Contests

Roman Sheremeta

Working Papers from Chapman University, Economic Science Institute

Abstract: This article experimentally studies a two-stage elimination contest and compares its performance with a one-stage contest. Contrary to the theory, the two-stage contest generates higher revenue than the equivalent one-stage contest. There is significant over-dissipation in both stages of the two-stage contest and experience diminishes over-dissipation in the first stage but not in the second stage. Our experiment provides evidence that winning is a component in a subject’s utility. A simple behavioral model that accounts for a non-monetary utility of winning can explain significant over-dissipation in both contests. It can also explain why the two-stage contest generates higher revenue than the equivalent one-stage contest.

Keywords: rent-seeking; contest; contest design; experiments; risk aversion; over-dissipation (search for similar items in EconPapers)
JEL-codes: C72 C91 D72 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2009-07
New Economics Papers: this item is included in nep-exp, nep-gth and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.chapman.edu/ESI/wp/ComparisonOfContests-Sheremeta.pdf (application/pdf)

Related works:
Journal Article: Experimental comparison of multi-stage and one-stage contests (2010)
Working Paper: Experimental Comparison of Multi-Stage and One-Stage Contests (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:09-04

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