All pay auctions and group size: Grading on a curve and other applications

James Andreoni and Andy Brownback

Journal of Economic Behavior & Organization, 2017, vol. 137, issue C, 361-373

Abstract: We model contests with a fixed proportion of prizes, such as a grading curve, as all-pay auctions where higher effort weakly increases the likelihood of a prize. We find theoretical predictions for the heterogeneous effect auction size has on effort from high- and low-types. We test our predictions in a laboratory experiment that compares behavior in two-bidder, one-prize auctions with behavior in 20-bidder, 10-prize auctions. We find a statistically significant 11.8% increase in aggregate bidding when moving from the small to large auction. The impact is heterogeneous: as the auction size increases, low-types decrease effort but high-types increase effort. Additionally, the larger auction provides a stronger rank-correlation between effort and ability, awarding more prizes to the higher-skilled and improving the efficiency of prize allocation.

Keywords: All-pay auctions; Contests; Group size; Education; Grading (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268117300835
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:137:y:2017:i:c:p:361-373

DOI: 10.1016/j.jebo.2017.03.017

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().