Contest Design: An Experimental Investigation

Roman Sheremeta

Working Papers from Chapman University, Economic Science Institute

Abstract: This paper experimentally compares the performance of four simultaneous lottery contests: a grand contest, two multiple prize settings (equal and unequal prizes), and a contest which consists of two subcontests. Consistent with the theory, the grand contest generates the highest effort levels among all simultaneous contests. In multi-prize settings, equal prizes produce lower efforts than unequal prizes. The results also support the argument that joint contests generate higher efforts than an equivalent number of subcontests. Contrary to the theory, there is significant over-dissipation. This over-dissipation can be partially explained by strong endowment size effects. Subjects who receive higher endowments tend to over-dissipate, while such over-dissipation disappears when the endowments are lower. This behavior is consistent with the predictions of a quantal response equilibrium. We also find that less risk-averse subjects over-dissipate more.

Keywords: rent-seeking; contest; contest design; experiments; risk aversion; over-dissipation (search for similar items in EconPapers)
JEL-codes: C72 C91 D72 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009-03
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://www.chapman.edu/ESI/wp/ContestDesignExperim ... gation-Sheremeta.pdf (application/pdf)

Related works:
Journal Article: CONTEST DESIGN: AN EXPERIMENTAL INVESTIGATION (2011)
Working Paper: Contest Design: An Experimental Investigation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:09-05

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