Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/113092
Authors: 
Stracke, Rudi
Kerschbamer, Rudolf
Sunde, Uwe
Year of Publication: 
2015
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Competition and Collusion D12-V2
Abstract: 
This paper investigates whether the timing of rewards affects behavior in multi-stage contests. Abstracting from discounting, theory predicts that it is irrelevant for behavior whether agents are immediately rewarded for succeeding on a particular stage, or whether the reward is delayed until the interaction on the subsequent stage is decided. When testing this prediction using a two-stage contest in lab experiments, we fnd that stage-2 efforts are identical in immediate and delayed reward treatments, while stage-1 effort is significantly lower if rewards are immediate. This difference can be explained by the salience of continuation values, which is strongly affected by the timing of rewards.
JEL: 
C72
M52
J33
Document Type: 
Conference Paper

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