Fight Alone or Together? The Need to Belong

Ke, Changxia

doi:10.2139/ssrn.1971641

Cited by 6 publications

(7 citation statements)

References 66 publications

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“…Both studies, however, document significant over-expenditure of effort relative to the Nash equilibrium prediction (up to five times the Nash equilibrium level) and very little free-riding. These results have been replicated by many other studies, including Sheremeta (2011), Cason et al (2012, Leibbrandt and Sääksvuori (2012), Ke (2013), Ke et al (2013Ke et al ( , 2015, Eisenkopf (2014), Bhattacharya (2015), Brookins et al (2015), and .…”

Section: Over-expenditure Of Effort Relative To the Theoretical Predisupporting

confidence: 65%

Behavior in Group Contests: A Review of Experimental Research

Sheremeta

2015

SSRN Journal

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Group contests are ubiquitous. Some examples include warfare between countries, competition between political parties, team-incentives within firms, group sports, and rent-seeking. In order to succeed, members of the same group have incentives to cooperate with each other by expending individual efforts. However, since effort is costly, each member also has an incentive to abstain from expending any effort and instead free-ride on the efforts of other members. Contest theory shows that the intensity of competition between groups and the amount of freeriding within groups depend on the group size, sharing rule, group impact function, contest success function, and heterogeneity of players. We review experimental studies testing these theoretical predictions. Almost all studies of behavior in group contests find significant overexpenditure of effort relative to the theory. We discuss potential explanations for such overexpenditure, including the utility of winning, bounded rationality, relative payoff maximization, parochial altruism, and social identity. Despite over-expenditure, most studies find support for the comparative statics predictions of the theory (with the exception of the "group size paradox"). Finally, studies show that there are effective mechanisms that can promote withingroup cooperation and conflict resolution mechanisms that can de-escalate and potentially eliminate between-group conflict.JEL Classifications: C7, C9, D7, H4, J4, K4, L2, M5

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Section: Over-expenditure Of Effort Relative To the Theoretical Predisupporting

confidence: 65%

Behavior in Group Contests: A Review of Experimental Research

Sheremeta

2015

SSRN Journal

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“…In a related study, Ke et al (2014) find that alliances are more likely to break down if the sharing rule is not the equal sharing rule. Finally, Ke (2011) finds that when allies share the prize proportionally (as in the deterministic proportional-prize contest), instead of probabilistically (as in the lottery contest), efforts are significantly lower by both allies and stand-alone opponents, resulting in higher payoffs to all competing parties. Therefore, alliance formation can be beneficial to both allies and stand-alone players.…”

Section: Group Contests and Alliancesmentioning

confidence: 99%

“…A distinct set of experiments examine the role played by the sharing rule within the winning group (e.g. Ke, 2011;Ke et al, 2013Ke et al, , 2014. The sharing rules that are compared are equal sharing, sharing proportional to individual effort and nested contests, whereby the members of the victorious alliance engage in a within-group contest.…”

Section: Group Contests and Alliancesmentioning

confidence: 99%

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

2012

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Many economic, political and social environments can be described as contests in which agents exert costly efforts while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey provides a comprehensive review of experimental research on these three canonical contests. First, we review studies investigating the basic structure of contests, including the number of players and prizes, spillovers and externalities, heterogeneity, risk and incomplete information. Second, we discuss dynamic contests and multi-battle contests. Then we review studies examining sabotage, feedback, bias, collusion, alliances, group contests and gender, as well as field experiments. Finally, we discuss applications of contests and suggest directions for future research. IntroductionMany economic, political and social environments can be described as contests in which competing agents have the opportunity to expend scarce resources -such as effort, money, time, or troops -in order to affect the probabilities of winning prizes. Examples range from the competition for mates, college admission, patents, or promotions within firms, to the process of litigation or lobbying politicians, to elections, sports competitions, and violent global conflicts (Tullock, 1967;Krueger, 1974). As is obvious from this list, these environments have attracted considerable attention in applications in a wide range of fields, both in-and out-side of economics. They have also been studied extensively by economic theorists in what has become known as the field of contest theory (Konrad, 2009). Although this field continues to attract many young theorists, it has its roots in three models developed in the mid-seventies to early eighties: the Tullock (1980) model of rent-seeking, the Lazear and Rosen (1981) rank-order tournament model, and the all-pay auction (Hirshleifer and Riley, 1978;Nalebuff and Stiglitz, 1983;Dasgupta, 1986;Hillman and Riley, 1989). Despite the fact that the three models historically developed somewhat independently, they represent special cases of a general contest model that can be formulated in a unified framework.Despite an extensive and established theoretical literature, much less effort has been devoted to empirically investigate individual behavior in different contests and compare such behavior with theoretical predictions. The main reason is that it is not trivial to measure individual effort in the field since the researcher can only observe the performance of contestants, which is a function of effort, ability and luck (Ericsson and Charness, 1994). The majority of empirical studies use either firm level data (Prendergast, 1999) or sports data (Szymanski, 2003). Because it is typically difficult to measure the actual effort expended by players in the field, almost all of these studies focus solely on investigating whether the pattern of outcomes is consistent with the theoretical predictions.Controlled experimen...

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“…The most notable comparative static prediction of the theory which is not supported by the data is the "group size paradox" (Olson, 1965). Almost all existing experimental studies examining the impact of group size on behavior in group contests find that larger groups are more likely to win than smaller groups, even when theory predicts otherwise (Rapoport and Bornstein, 1989;Abbink et al, 2010;Kugler et al, 2010;Ahn et al, 2011;Ke, 2013). So, while weak players may exploit strong players within their own large group by free-riding, it is not to the detriment of the group's payoff in the broader contest, as Olson would have anticipated.…”

Section: Group Contestsmentioning

confidence: 89%

Experimental Research on Contests

Sheremeta

2018

The New Palgrave Dictionary of Economics

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Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants' efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review of such studies.

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Fight Alone or Together? The Need to Belong

Cited by 6 publications

References 66 publications

Behavior in Group Contests: A Review of Experimental Research

Behavior in Group Contests: A Review of Experimental Research

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

Experimental Research on Contests

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