Endogenous group formation in experimental contests

Luisa Herbst, Kai Konrad and Florian Morath

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We study endogenous group formation in tournaments employing experimental three-player contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending effort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower effort. Anticipation of this exploitation may explain their preference to stand alone.

Keywords: Endogenous group formation; contest; conflict; alliance; experiment; moral hazard problem; free-riding; in-group favoritism (search for similar items in EconPapers)
JEL-codes: D72 D74 (search for similar items in EconPapers)
Date: 2013-04-22
New Economics Papers: this item is included in nep-cdm, nep-cta, nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Endogenous group formation in experimental contests (2015)
Working Paper: Endogenous group formation in experimental contests (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:419

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