Experimental Comparison of Multi-Stage and One-Stage Contests

Roman Sheremeta

MPRA Paper from University Library of Munich, Germany

Abstract: This article experimentally studies a two-stage elimination contest and compares its performance with a one-stage contest. Contrary to the theory, the two-stage contest generates higher revenue than the equivalent one-stage contest. There is significant over-dissipation in both stages of the two-stage contest and experience diminishes over-dissipation in the first stage but not in the second stage. Our experiment provides evidence that winning is a component in a subject’s utility. A simple behavioral model that accounts for a non-monetary utility of winning can explain significant over-dissipation in both contests. It can also explain why the two-stage contest generates higher revenue than the equivalent one-stage contest.

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)
Date: 2009-07-16
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Experimental comparison of multi-stage and one-stage contests (2010)
Working Paper: Experimental Comparison of Multi-Stage and One-Stage Contests (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:49884

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