Best-of-Three Contests: Experimental Evidence

35 Pages Posted: 24 Sep 2011

See all articles by Roman M. Sheremeta

Roman M. Sheremeta

Case Western Reserve University

Shakun D. Mago

University of Richmond - E. Claiborne Robins School of Business

Andrew Yates

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: May 5, 2011

Abstract

We conduct an experimental analysis of a best-of-three Tullock contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The patterns of players’ efforts and the probability that a contest ends in two rounds is consistent with “strategic momentum,” i.e. momentum generated due to strategic incentives inherent in the contest. We do not find evidence for “psychological momentum,” i.e. momentum which emerges when winning affects player's confidence. Similar to previous studies of contests, we find significantly higher efforts than predicted and strong heterogeneity in effort between subjects.

Keywords: best-of-three contest, experiments, strategic momentum, psychological momentum

JEL Classification: C72, C91, D72

Suggested Citation

Sheremeta, Roman M. and Mago, Shakun Datta and Yates, Andrew, Best-of-Three Contests: Experimental Evidence (May 5, 2011). Available at SSRN: https://ssrn.com/abstract=1932470 or http://dx.doi.org/10.2139/ssrn.1932470

Roman M. Sheremeta (Contact Author)

Case Western Reserve University ( email )

10900 Euclid Ave.
Cleveland, OH 44106
United States

Shakun Datta Mago

University of Richmond - E. Claiborne Robins School of Business ( email )

Richmond, VA 23173
United States

Andrew Yates

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
97
Abstract Views
506
rank
269,090
PlumX Metrics