Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/100433
Authors: 
Stracke, Rudi
Höchtl, Tanja
Kerschbamer, Rudolf
Sunde, Uwe
Year of Publication: 
2014
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Experimental Economics III C09-V2
Abstract: 
This paper investigates how heterogeneity in contestants' investment costs affects the competition intensity in a dynamic elimination contest. Theory predicts that the absolute level of investment costs has no effect on the competition intensity in homogeneous interactions. Relative cost differences in heterogeneous interactions, however, reduce equilibrium expenditures. Evidence from lab experiments for treatments with homogeneous participants is qualitatively in line with the theoretical prediction. The effect of cost differences on expenditures is positive rather than negative, however, in all heterogeneous treatments.
JEL: 
C72
D72
C99
Document Type: 
Conference Paper

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