Who is declared dead lives longer

Oliver Gürtler and Matthias Kräkel

Applied Economics Letters, 2003, vol. 10, issue 15, 995-997

Abstract: We consider a contest between a small and a large team. On the one hand, the large team has the advantage of more people exerting effort (quantity effect). On the other hand, the large team suffers from more free riding (free-riding effect). The results show that - depending on the convexity of the cost function - the small team will have a higher probability of winning the contest, if the free-rider effect dominates the quantity effect. Moreover, even if the large team has a higher winning probability, an individual player prefers to belong to the small team.

Date: 2003
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DOI: 10.1080/1350485032000165430

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