Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89700
Authors: 
Hörtnagl, Tanja
Kerschbamer, Rudolf
Stracke, Rudi
Sunde, Uwe
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4435
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.
Subjects: 
multi-stage contest
heterogeneity
experiment
joy of winning
JEL: 
C72
D72
Document Type: 
Working Paper

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