TY - JOUR
T1 - Inequality and Competitive Effort: The Roles of Asymmetric Resources, Opportunity and Outcomes
AU - Fallucchi, Francesco
AU - Ramalingam, Abhijit
AU - Rockenbach, Bettina
AU - Waligora, Marcin
PY - 2021/5/1
Y1 - 2021/5/1
N2 - We investigate how individuals react to different types of asymmetries in experimental twoplayer Tullock contests where contestants expend resources to win a prize. We compare the effects of three different sources of asymmetry: resources, abilities and possible outcomes. We find that overall competitive effort is greatest in the presence of asymmetric abilities. Unlike other forms, asymmetry in abilities elicits a very aggressive reaction from disadvantaged players relative to their advantaged opponents. The Quantal Response Equilibrium (QRE) suggests that financial incentives are less salient in the presence of a biased contest procedure. We explore asymmetric abilities further in a second study that varies the degree of asymmetry. We find that advantaged players exploit their privileged position while disadvantaged players exhibit volatile behavior, either giving up or matching their opponents. We conclude that a desire to win drives behavior in this asymmetric setting.
AB - We investigate how individuals react to different types of asymmetries in experimental twoplayer Tullock contests where contestants expend resources to win a prize. We compare the effects of three different sources of asymmetry: resources, abilities and possible outcomes. We find that overall competitive effort is greatest in the presence of asymmetric abilities. Unlike other forms, asymmetry in abilities elicits a very aggressive reaction from disadvantaged players relative to their advantaged opponents. The Quantal Response Equilibrium (QRE) suggests that financial incentives are less salient in the presence of a biased contest procedure. We explore asymmetric abilities further in a second study that varies the degree of asymmetry. We find that advantaged players exploit their privileged position while disadvantaged players exhibit volatile behavior, either giving up or matching their opponents. We conclude that a desire to win drives behavior in this asymmetric setting.
KW - Rent seeking
KW - Contest
KW - Experiment
KW - Asymmetry
KW - QRE
KW - Desire to win
UR - https://www.mendeley.com/catalogue/0c677c19-7c5f-34bc-b994-11c8b9e9e15f/
UR - http://www.scopus.com/inward/record.url?scp=85102319636&partnerID=8YFLogxK
U2 - https://doi.org/10.1016/j.jebo.2021.02.013
DO - https://doi.org/10.1016/j.jebo.2021.02.013
M3 - Article
SN - 0167-2681
VL - 185
SP - 81
EP - 96
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
ER -