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Multi-Battle Contests: An Experimental Study

Shakun Mago () and Roman Sheremeta ()

Working Papers from Chapman University, Economic Science Institute

Abstract: This study examines behavior of subjects in simultaneous and sequential multi-battle contests. In simultaneous contests, subjects make positive bids in each battle 80% of the time and bids fall within the predicted boundaries. However, 35% of the time subjects make positive bids in only two, instead of all three, battles and they significantly overuse moderately high bids. In sequential contests, theory predicts sizable bids in the first battle and no bids in the subsequent battles. Contrary to this prediction, subjects significantly underbid in the first battle and overbid in subsequent battles. Consequently, instead of always ending in the second battle, contest proceeds to the third battle 38% of the time. Finally, in both simultaneous and sequential settings, subjects make higher aggregate bids than predicted resulting in negative expected payoffs.

Keywords: multi-battle contest; experiments; risk aversion; overdissipation (search for similar items in EconPapers)
JEL-codes: C72 C91 D72 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2012
New Economics Papers: this item is included in nep-evo and nep-exp
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Citations: View citations in EconPapers (21) Track citations by RSS feed

Downloads: (external link)
http://www.chapman.edu/ESI/wp/Sheremeta-Multi-Battle-Contests.pdf (application/pdf)

Related works:
Journal Article: Multi‐battle Contests: An Experimental Study (2017) Downloads
Working Paper: Multi-Battle Contests: An Experimental Study (2016) Downloads
Working Paper: Multi-Battle Contests: An Experimental Study (2016) Downloads
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