Heterogeneity in Rent-Seeking Contests with Multiple Stages: Theory and Experimental Evidence

Tanja Hörtnagl (), Rudolf Kerschbamer, Rudi Stracke and Uwe Sunde

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: This paper investigates how heterogeneity in contestants' investment costs affects the competition intensity in a dynamic elimination contest. Theory predicts that the absolute level of investment costs has no effect on the competition intensity in homogeneous interactions. Relative cost differences in heterogeneous interactions, however, reduce equilibrium expenditures. Evidence from lab experiments for treatments with homogeneous participants is qualitatively in line with the theoretical prediction. The effect of cost differences on expenditures is positive rather than negative, however, in all heterogeneous treatments.

Keywords: Multi-Stage Contest; Heterogeneity; Experiment; Joy of Winning (search for similar items in EconPapers)
JEL-codes: C72 D72 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2013-10
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Heterogeneity in rent-seeking contests with multiple stages: Theory and experimental evidence (2023)
Working Paper: Heterogeneity in Rent-Seeking Contests with Multiple Stages: Theory and Experimental Evidence (2023)
Working Paper: Heterogeneity in Rent-Seeking Contests with Multiple Stages: Theory and Experimental Evidence (2014)
Working Paper: Heterogeneity in Rent-Seeking Contests with Multiple Stages: Theory and Experimental Evidence (2013)
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