Indefinitely repeated contests with incumbency advantage

Cary Deck (), Zachary Dorobiala () and Paan Jindapon
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Zachary Dorobiala: The University of Alabama
Paan Jindapon: The University of Alabama

Journal of the Economic Science Association, 2024, vol. 10, issue 2, No 4, 232-254

Abstract: Abstract We study an indefinitely repeated Tullock contest in which the stage-game winner gains an incumbency advantage in the next stage-game. The incumbent’s advantage allows the incumbent to carry over a proportion of their expenditure in the previous contest to the next contest. Theoretically, this advantage is not predicted to have a large impact on total expenditure. However, in a controlled laboratory experiment, we find the incumbency advantage increases total expenditure by a significant amount. Further, we find that carryover has a discouraging effect on challengers while encouraging incumbents react in a retaliatory manner.

Keywords: Infinitely repeated games; Tullock contests; Incumbency advantage; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: C72 C91 D72 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40881-023-00154-2

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