Behavioral Dimensions of Contests

Roman Sheremeta ()
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Roman Sheremeta: Weatherhead School of Management, Case Western Reserve University and The Economic Science Institute, Chapman University

Working Papers from Chapman University, Economic Science Institute

Abstract: The standard theoretical description of rent-seeking contests is that of rational individuals or groups engaging in socially inefficient behavior by exerting costly effort. Experimental studies find that the actual efforts of participants are significantly higher than predicted in the models based on rational behavior and that over-dissipation of rents (or overbidding or over-expenditure of resources) can occur. Although over-dissipation cannot be explained by the standard rational-behavior theory, it can be explained by incorporating behavioral dimensions into the standard model, such as (1) the utility of winning, (2) relative payoff maximization, (3) bounded rationality, and (4) judgmental biases. These explanations are not exhaustive but provide a coherent picture of important behavioral dimensions to be considered when studying rent-seeking behavior in theory and in practice.

Keywords: rent-seeking; contests; experiments; overbidding; over-dissipation (search for similar items in EconPapers)
Pages: 22 pages
Date: 2014
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth, nep-hpe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Behavioral Dimensions of Contests (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:14-14

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