Inequality and competitive effort: The roles of asymmetric resources, opportunity and outcomes

Francesco Fallucchi, Abhijit Ramalingam, Bettina Rockenbach and Marcin Waligora

Journal of Economic Behavior & Organization, 2021, vol. 185, issue C, 81-96

Abstract: We investigate how individuals react to different types of asymmetries in experimental two-player Tullock contests where contestants expend resources to win a prize. We compare the effects of three different sources of asymmetry: resources, abilities and possible outcomes. We find that overall competitive effort is greatest in the presence of asymmetric abilities. Unlike other forms, asymmetry in abilities elicits a very aggressive reaction from disadvantaged players relative to their advantaged opponents. The Quantal Response Equilibrium (QRE) suggests that financial incentives are less salient in the presence of a biased contest procedure. We explore asymmetric abilities further in a second study that varies the degree of asymmetry. We find that advantaged players exploit their privileged position while disadvantaged players exhibit volatile behavior, either giving up or matching their opponents. We conclude that a desire to win drives behavior in this asymmetric setting.

Keywords: Rent seeking; Contest; Experiment; Asymmetry; QRE; Desire to win (search for similar items in EconPapers)
JEL-codes: C91 C92 D31 D72 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268121000779
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Inequality and Competitive Effort: The Roles of Asymmetric Resources, Opportunity and Outcomes (2018)
Working Paper: Inequality and Competitive Effort: The Roles of Asymmetric Resources, Opportunity and Outcomes (2017)
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:185:y:2021:i:c:p:81-96

DOI: 10.1016/j.jebo.2021.02.013

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 ().