We design an experiment to study investment behavior in different repeated contest settings, varying the uncertainty of the outcomes and the number of participants in contests. We find decreasing over-expenditures and a higher rate of ‘dropout’ in contests with high uncertainty over outcomes (winner-take-all contests), while we detect a quick convergence toward equilibrium predictions and a near to full participation when this type of uncertainty vanishes (proportional-prize contests). These results are robust to changes in the number of contestants. A learning parameter estimation using the experience-weighted attraction (EWA) model suggests that subjects adopt different learning modes across different contest structures and helps to explain expenditure patterns deviating from theoretical predictions.
|Titolo:||Learning and dropout in contests: an experimental approach|
RICCABONI, MASSIMO (Corresponding)
|Data di pubblicazione:||2020|
|Appare nelle tipologie:||1.1 Articolo in rivista|