Top guns may not fire: Best-shot group contests with group-specific public good prizes

Chowdhury, Subhasish M.; Lee, Dong-Ryul; Sheremeta, Roman M.

doi:10.1016/j.jebo.2013.04.012

Cited by 75 publications

(56 citation statements)

References 29 publications

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“…Our general conjecture is that in group rent-seeking contests, similar to the one studied in this paper, mechanisms such as communication that lead to better within-group coordination will reduce efficiency. Future research can investigate how robust our findings are when the best-shot or summation (perfect-substitutes) technology is used within groups instead of the weakest-link effort aggregation rule (Abbink et al, 2010;Sheremeta, 2011;Chowdhury et al, 2011). Two pilot sessions we have conducted suggest that the general conclusion of our experiment stands: intra-group communication also improves coordination but reduces efficiency in the best-shot and perfect-substitutes contests.…”

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confidence: 84%

Communication and efficiency in competitive coordination games

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Sheremeta

Zhang

2012

Games and Economic Behavior

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Costless pre-play communication has been found to effectively facilitate coordination and enhance efficiency in games with Pareto-ranked equilibria. We report an experiment in which two groups compete in a weakest-link contest by expending costly efforts. Allowing intra-group communication leads to more aggressive competition and greater coordination than control treatments without any communication. On the other hand, allowing inter-group communication leads to less destructive competition. As a result, intra-group communication decreases while inter-group communication increases payoffs. Our experiment thus provides an example of an environment where communication can either enhance or damage efficiency. This contrasts sharply with experimental findings from public goods and other coordination games, where communication always enhances efficiency and often leads to socially optimal outcomes. JEL Classifications: C70, D72, H41

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confidence: 84%

Communication and efficiency in competitive coordination games

Cason

Sheremeta

Zhang

2012

Games and Economic Behavior

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154

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“…Since effort is costly, each member also has an incentive to shirk in contributing effort and free-ride on the efforts of other members. Theoretically, the amount of free-riding that occurs within a group depends on the composition of the group, the technologies of group performance, and the rules that regulate the competition (Baik, 1993;Lee, 2012;Chowdhury et al, 2013b).…”

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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“…Indeed, for < 0 and a given level of individual e¤ort, total production is lower when the group is composed of two (or more) members than when it has only one member. 2 Although it can …nd some support in situations where, for example, the managers of a company with similar abilities step on each other for consolidating their own power (see, e.g., Miles and Watkins, 2007), it makes less sense for addressing the collective problem within groups in a context of competition between those groups. In the following, we thus restrict the analysis to 2 (0; 1].…”

Section: The Modelmentioning

confidence: 99%

“…Lee (2012) considers weakest-link contests for group-speci…c public prizes, while Chowdhury and al. (2013) take the other extreme by considering best-shot group contests.…”

Section: Introductionmentioning

confidence: 99%