Indefinitely Repeated Contests: An Experimental Study
45 Pages Posted: 25 Feb 2018 Last revised: 22 Jul 2018
Date Written: July 12, 2018
We experimentally explore indefinitely repeated contests. Theory predicts more cooperation, in the form of lower expenditures, in indefinitely repeated contests with a longer expected time horizon, yet our data do not support this prediction. Theory also predicts more cooperation in indefinitely repeated contests compared to finitely repeated contests of the same expected length, but we find no significant difference empirically. When controlling for risk and gender, we actually find significantly higher long-run expenditure in some indefinite contests relative to finite contests. Finally, theory predicts no difference in cooperation across indefinitely repeated winner-take-all and proportional-prize contests. We find significantly less cooperation in the latter, because female participants expend more on average than their male counterparts in our data. Our paper extends the experimental literature on indefinitely repeated games to contests and, more generally, contributes to an infant empirical literature on behavior in indefinitely repeated games with "large" strategy spaces.
Keywords: contest, repeated game, cooperation, experiment
JEL Classification: C72, C73, C91, D72
Suggested Citation: Suggested Citation