Abstract
Most laboratory experiments studying Tullock contest games find that bids significantly exceed the risk-neutral equilibrium predictions. We test the generalisability of these results by comparing a typical experimental implementation of a contest against the familiar institution of a ticket-based raffle. We find that in the raffle (1) initial bid levels are significantly lower and (2) bids adjust more rapidly towards expected-earnings best responses. We demonstrate the robustness of our results by replicating them across two continents at two university labs with contrasting student profiles.
Original language | English |
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Pages (from-to) | 405-429 |
Number of pages | 25 |
Journal | Theory and Decision |
Volume | 88 |
Issue number | 3 |
Early online date | 14 Nov 2019 |
DOIs | |
Publication status | Published - 1 Apr 2020 |
Funding
This project was supported by the Network for Integrated Behavioural Science (Economic and Social Research Council Grant ES/K002201/1). We thank Catherine Eckel, Michael Kurschilgen, Aidas Masiliunas, Peter Moffatt, and Henrik Orzen, the editor and two anonymous referees, as well as participants at the Contests: Theory and Evidence Conference, Eastern ARC Workshop, Jadavpur University Annual Conference 2016, and the Visions in Methodology Conference for helpful comments. We thank Tim Cason and the Vernon Smith Experimental Economics Laboratory at Purdue University for allowing us to use their facilities. Any errors are the sole responsibility of the authors.
Keywords
- Experiment
- Learning
- Mechanism equivalence
- Raffle
ASJC Scopus subject areas
- General Decision Sciences
- Developmental and Educational Psychology
- Arts and Humanities (miscellaneous)
- Applied Psychology
- General Social Sciences
- Economics, Econometrics and Finance(all)
- Computer Science Applications