Experimental comparison of multi-stage and one-stage contests

Roman Sheremeta

Games and Economic Behavior, 2010, vol. 68, issue 2, 731-747

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)
Date: 2010
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Citations: View citations in EconPapers (278)

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Related works:
Working Paper: Experimental Comparison of Multi-Stage and One-Stage Contests (2009)
Working Paper: Experimental Comparison of Multi-Stage and One-Stage Contests (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:68:y:2010:i:2:p:731-747

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