New Hampshire Effect: Behavior in Sequential and Simultaneous Multi-Battle Contests
Shakun Mago () and
Roman Sheremeta ()
MPRA Paper from University Library of Munich, Germany
Sequential multi-battle contests are predicted to induce lower expenditure than simultaneous contests. This prediction is a result of a “New Hampshire Effect” – a strategic advantage created by the winner of the first battle. Although our laboratory study provides evidence for the New Hampshire Effect, we find that sequential contests generate significantly higher (not lower) expenditure than simultaneous contests. This is mainly because in sequential contests, there is significant over-expenditure in all battles. We suggest sunk cost fallacy and utility of winning as two complementary explanations for this behavior and provide supporting evidence.
Keywords: election; sequential contests; simultaneous contests; experiments (search for similar items in EconPapers)
JEL-codes: C72 C73 C91 D72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
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Working Paper: New Hampshire Effect: Behavior in Sequential and Simultaneous Multi-Battle Contests (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:85337
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