Korean Economic Review, 2011, 27, 5-32.
31 Pages Posted: 2 Dec 2009 Last revised: 24 Sep 2012
Date Written: September 9, 2009
This experiment investigates contests between groups. Each group has one strong player, with a higher valuation for the prize, and two weak players, with lower valuations. In contests where individual efforts are perfect substitutes, both strong and weak players expend significantly higher efforts than predicted by theory. In best-shot contests, where group performance depends on the best performer within the group, most of the effort is expended by strong players while weak players free-ride. In weakest-link contests, where group performance depends on the worst performer within the group, there is almost no free-riding and all players expend similar positive efforts.
Keywords: contest, between-group competition, within-group competition, asymmetry, coordination, free-riding, experiments
JEL Classification: C71, C72, C91, C92, D72, H41
Suggested Citation: Suggested Citation
Sheremeta, Roman M., Perfect-Substitutes, Best-Shot, and Weakest-Link Contests Between Groups (September 9, 2009). Korean Economic Review, 2011, 27, 5-32.. Available at SSRN: https://ssrn.com/abstract=1516019 or http://dx.doi.org/10.2139/ssrn.1516019