Single versus Multiple Prize Contests to Finance Public Goods: Theory and Experimental Evidence
Marco Faravelli and
Luca Stanca ()
No 200715, Discussion Paper Series, School of Economics and Finance from School of Economics and Finance, University of St Andrews
This paper investigates single and multiple prize contests as incentive mechanisms for the private provision of public goods, under the assumptions of income heterogeneity and incomplete information about income levels. We compare experimentally a one-prize contest with a three-prize contest in a case where theory predicts that several prizes maximise revenues. We find that, contrary to the theoretical predictions, total contributions are significantly higher in the one-prize contest. In both treatments contributions converge towards theoretical predictions over successive rounds, but the effects of repetition are different: convergence is fast in the one-prize treatment, while gradual and with some undershooting in the three-prize treatment. Focusing on individual income types, the better performance of the single-prize contest is largely explained by the contributions of high income individuals: a single larger prize provides a more effective incentive for richer individuals than three smaller prizes.
Keywords: Auctions; Public Goods; Laboratory Experiments (search for similar items in EconPapers)
JEL-codes: C91 D44 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.st-andrews.ac.uk/~wwwecon/papers/dp0715.pdf [302 Found]--> https://www.st-andrews.ac.uk/~wwwecon/papers/dp0715.pdf)
Working Paper: Single versus Multiple Prize Contests to Finance Public Goods: Theory and Experimental Evidence (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:san:wpecon:0715
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Discussion Paper Series, School of Economics and Finance from School of Economics and Finance, University of St Andrews School of Economics and Finance, Castlecliffe, The Scores, Fife, KY16 9AZ. Contact information at EDIRC.
Bibliographic data for series maintained by The School of Economics and Finance ().