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

Rudi Stracke, Tanja Höchtl, Rudolf Kerschbamer and Uwe Sunde

VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy from Verein für Socialpolitik / German Economic Association

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.

JEL-codes: C72 C99 D72 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-exp and nep-gth
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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 (2013)
Working Paper: Heterogeneity in Rent-Seeking Contests with Multiple Stages: Theory and Experimental Evidence (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc14:100433

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