Strategic Behavior in Contests with Ability Heterogeneous Contestants: Evidence from Field Data

54 Pages Posted: 6 Jun 2019 Last revised: 13 Feb 2020

See all articles by Christoph Riedl

Christoph Riedl

Northeastern University - D’Amore-McKim School of Business; Northeastern University - College of Computer and Information Science; Harvard University - Institute for Quantitative Social Science

Tom Grad

Copenhagen Business School - Department of Strategy and Innovation

Christopher Lettl

Vienna University of Economics and Business

Date Written: February 11, 2020

Abstract

Strategic behavior can not only affect effort in contests but also undermine their selection function. We investigate two forms of strategic behavior of contestants with heterogeneous ability in large contests: Sabotage and self- promotion. We test predictions from a simple theoretical model in a large dataset of more than 38 million peer-ratings by 75,000 individuals. We find that strategic behavior influences outcomes in 25% of close contests, that self- promotion is the dominant form of strategic behavior of low-ability contestants, and that high-ability contestants are both culprits and targets of sabotage. We leverage two natural experiments to rule out alternative explanations. Our findings are most consistent with the explanation that competitors sabotage because they care about winning and anticipate being sabotaged themselves.

Keywords: contests, tournaments, sabotage, self-promotion, heterogeneous agents, diff-in-diff, natural experiments

JEL Classification: J22, J3, J24, D82

Suggested Citation

Riedl, Christoph and Grad, Tom and Lettl, Christopher, Strategic Behavior in Contests with Ability Heterogeneous Contestants: Evidence from Field Data (February 11, 2020). Available at SSRN: https://ssrn.com/abstract=3387056 or http://dx.doi.org/10.2139/ssrn.3387056

Christoph Riedl (Contact Author)

Northeastern University - D’Amore-McKim School of Business ( email )

360 Huntington Ave.
Boston, MA 02115
United States

HOME PAGE: http://www.christophriedl.net

Northeastern University - College of Computer and Information Science ( email )

360 Huntington Avenue
Boston, MA 02115
United States

Harvard University - Institute for Quantitative Social Science ( email )

1737 Cambridge St.
Cambridge, MA 02138
United States

HOME PAGE: http://christophriedl.net

Tom Grad

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilenvej 14A
Fredericksberg, Copenhagen 2000
Denmark

Christopher Lettl

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

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