Endogenous entry in contests

By John Morgan, Henrik Orzen, Martin Sefton. 2012

125 citations recorded by the source corpus.

We report the results of laboratory experiments on rent-seeking contests with endogenous participation. Theory predicts that (a) contest entry and rent-seeking expenditures increase with the size of the prize and (b) earnings are equalized between the contest and the outside option. While the directional predictions offered in (a) are supported in the data, the level predictions are not. Prediction (b) is not supported in the data: when the prize is large, contest participants earn more than the outside option. When the prize is small, contest participants earn less. Previous studies of gender and contest competition suggest that females should (a) not perform as well in the contest; and (b) enter at a lower rate. We find some support for (a) but not for (b). Women participate in the contest at the same rate as men.

Subfields: Economics and Econometrics, General Decision Sciences, Safety Research

View Paper: https://www.semanticscholar.org/paper/53f0b61fdee5ece883d66b18ac684e9074a4dbd1

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Citations in the corpus

Resource Allocation Contests: Experimental Evidence (2013, unknown): “…been subject to extensive experimental scrutiny (Davis and Reilly, 1998; Potters et al., 1998; Tong and Leung, 2002; Anderson and Stafford, 2003; Herrmann and Orzen, 2008; Nieken and Sliwka, 2010; Sheremeta and Zhang, 2010, Price and Sheremeta, 2011, 2013; Lim et al., 2012; Morgan et al., 2012).”
Entry into Winner-Take-All and Proportional-Prize Contests: An Experimental Study (2010, background): “Winner-take-all tournaments can also lead to a more unequal distribution of income (Frank and Cook, 1996). Moldovanu and Sela (2001) show that an alternative tournament design with multiple prizes elicits higher aggregate performance when the cost of effort is convex.”
Political Culture and Discrimination in Contests (2011, background): “Third, it compares the two most widely studied types of contest success functions (all-pay-auctions and logit 2 Notably these actions include their efforts, Congleton, Hillman and Konrad (2008), Konrad (2009) and to their decisions to enter the contest, Morgan, Orzen and Sefton (2008).”
Overbidding and Heterogeneous Behavior in Contest Experiments (2013, unknown): “Contests have been commonly used in the study of R&D races and political or rent-seeking competitions (Millner and Pratt, 1989; Davis and Reilly, 1998; Potters et al., 1998; Sheremeta, 2010, 2011; Sheremeta and Zhang, 2010; Price and Sheremeta, 2011, 2012; Morgan et al., 2012).”
SIMULTANEOUS DECISION‐MAKING IN COMPETITIVE AND COOPERATIVE ENVIRONMENTS (2013, unknown): “In contests, individuals overbid relative to Nash equilibrium (Millner and Pratt, 1989, 1991; Sheremeta, 2011; Morgan et al., 2012).1 In VCMs, individuals contribute half-way between the equilibrium free riding and the Pareto optimal level, with contributions declining over time (Ledyard, 1995;…”
A survey of experimental research on contests, all-pay auctions and tournaments (2014, methodology): “Morgan et al. (2012) also find support for this comparative static prediction with different group sizes.”