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Experimental Research on Contests

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The New Palgrave Dictionary of Economics

Abstract

Costly competitions between economic agents are modelled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others, are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multistage races, wars of attrition, tug-of-wars), multidimensional contests (such as Colonel Blotto games) and contests between groups. This article provides a short review of such studies.

This chapter was originally published in The New Palgrave Dictionary of Economics Online, 2019. Edited by Palgrave Macmillan.

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Acknowledgments

I want to thank Tim Cason, Subhasish Chowdhury, Philip Brookins, Cary Deck, Erik Kimbrough, Michael Kirchler, and Kevin Laughren for very helpful comments and suggestions. I remain solely responsible for any errors or omissions.

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Authors and Affiliations

  1. Weatherhead School of Management, Case Western Reserve University, Cleveland, OH, USA

    Roman M. Sheremeta

  2. Economic Science Institute, Chapman University, Orange, CA, USA

    Roman M. Sheremeta

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  1. Roman M. Sheremeta
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Correspondence to Roman M. Sheremeta .

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    1. Dept. of Economics, Lafayette College, Easton, PA, USA

      Joaquín Gómez-Miñambres

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    Sheremeta, R.M. (2019). Experimental Research on Contests. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_3077-1

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    • DOI: https://doi.org/10.1057/978-1-349-95121-5_3077-1

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