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GRIND OR GAMBLE? AN EXPERIMENT ON EFFORT AND SPREAD SEEKING IN CONTESTS

Andersson, Ola ; Holm, Håkan J. LU and Wengström, Erik LU (2020) In Economic Inquiry 58(1). p.169-183
Abstract

We conduct a contest experiment to study if spread seeking and effort can be managed when participants can invest in increasing both the mean and the spread of an uncertain performance variable. Subjects are treated with different prize schemes and in accordance with theory, we observe higher investments in spread for the winner-take-all scheme. Both types of investments can be controlled with a three-level prize scheme. However, the control management is imperfect and behavior is characterized by inertia. We also explore the correlation between effort and spread across subjects and find that is robustly positive.

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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Economic Inquiry
volume
58
issue
1
pages
169 - 183
publisher
Wiley-Blackwell
external identifiers
  • scopus:85074355303
ISSN
0095-2583
DOI
10.1111/ecin.12852
language
English
LU publication?
yes
id
baf65e61-2c66-46e7-b984-99a02e0eba34
date added to LUP
2019-11-20 09:40:28
date last changed
2019-11-25 09:35:46
@article{baf65e61-2c66-46e7-b984-99a02e0eba34,
  abstract     = {<p>We conduct a contest experiment to study if spread seeking and effort can be managed when participants can invest in increasing both the mean and the spread of an uncertain performance variable. Subjects are treated with different prize schemes and in accordance with theory, we observe higher investments in spread for the winner-take-all scheme. Both types of investments can be controlled with a three-level prize scheme. However, the control management is imperfect and behavior is characterized by inertia. We also explore the correlation between effort and spread across subjects and find that is robustly positive.</p>},
  author       = {Andersson, Ola and Holm, Håkan J. and Wengström, Erik},
  issn         = {0095-2583},
  language     = {eng},
  month        = {01},
  number       = {1},
  pages        = {169--183},
  publisher    = {Wiley-Blackwell},
  series       = {Economic Inquiry},
  title        = {GRIND OR GAMBLE? AN EXPERIMENT ON EFFORT AND SPREAD SEEKING IN CONTESTS},
  url          = {http://dx.doi.org/10.1111/ecin.12852},
  doi          = {10.1111/ecin.12852},
  volume       = {58},
  year         = {2020},
}