Arbeitspapier
Designing contests between heterogeneous contestants: An experimental study of tie-breaks and bid-caps in all-pay auctions
A well-known theoretical result in the contest literature is that greater heterogeneity decreases performance of contestants because of the "discouragement effect." Leveling the playing field by favoring weaker contestants through bid-caps and favorable tie-breaking rules can reduce the discouragement effect and increase the designer's revenue. We test these predictions in an experiment. Our data show that indeed, strengthening weaker contestants through tie-breaks and bid-caps significantly diminishes the discouragement effect. Bid-caps can also improve revenue. Most deviations from Nash equilibrium can be explained by the level-k model of reasoning.
- Sprache
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Englisch
- Erschienen in
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Series: Working Paper ; No. 796
- Klassifikation
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Wirtschaft
Noncooperative Games
Design of Experiments: Laboratory, Individual
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- Thema
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All-pay auction
Rent-seeking
Bid-caps
Tie-breaks
Contest design
- Ereignis
-
Geistige Schöpfung
- (wer)
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Llorente-Saguer, Aniol
Sheremeta, Roman M.
Szech, Nora
- Ereignis
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Veröffentlichung
- (wer)
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Queen Mary University of London, School of Economics and Finance
- (wo)
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London
- (wann)
-
2016
- Handle
- Letzte Aktualisierung
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10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Llorente-Saguer, Aniol
- Sheremeta, Roman M.
- Szech, Nora
- Queen Mary University of London, School of Economics and Finance
Entstanden
- 2016