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Overbidding and heterogeneous behavior in contest experiments:A meta-comment on cross-cultural differences

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  • Chowdhury, Subhasish M.
  • Marini, Matteo M.

Abstract

We revisit the analyses by Sheremeta (2013) and Chowdhury and Moffatt (2017), who pool experimental data from 30 Tullock contests to explain the phenomenon of overbidding. The authors find that the overbidding rate is positively related to the number of contestants and has an inverted U-shaped relationship with the relative endowment. We reuse their data and extend the analysis in the direction of cross-cultural differences, focusing on ethno-linguistic-religious fractionalization as a country-level measure. The results suggest an increased explanatory power of the model, with fractionalization negatively relating to overbidding. In addition, the extended model shows that in the one-shot game the overbidding rate is significantly higher than in the case of repeated interactions. We discuss possible interpretations of our findings.

Suggested Citation

  • Chowdhury, Subhasish M. & Marini, Matteo M., 2024. "Overbidding and heterogeneous behavior in contest experiments:A meta-comment on cross-cultural differences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 110(C).
    • Handle: RePEc:eee:soceco:v:110:y:2024:i:c:s221480432400048x
    DOI: 10.1016/j.socec.2024.102210
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    1. Subhasish M. Chowdhury & Dan Kovenock & Anwesha Mukherjee, 2024. "Experimental Research on Contests," Working Papers 2024004, The University of Sheffield, Department of Economics.
    2. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, Decembrie.
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    4. Kyung Hwan Baik & Subhasish M. Chowdhury & Abhijit Ramalingam, 2021. "Group size and matching protocol in contests," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(4), pages 1716-1736, November.
    5. Subhasish M. Chowdhury & Peter G. Moffatt, 2017. "Overbidding And Heterogeneous Behavior In Contest Experiments: A Comment On The Endowment Effect," Journal of Economic Surveys, Wiley Blackwell, vol. 31(2), pages 572-576, April.
    6. Kyung Hwan Baik & Subhasish M. Chowdhury & Abhijit Ramalingam, 2020. "The effects of conflict budget on the intensity of conflict: an experimental investigation," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 240-258, March.
    7. Sheremeta, Roman M., 2010. "Experimental comparison of multi-stage and one-stage contests," Games and Economic Behavior, Elsevier, vol. 68(2), pages 731-747, March.
    8. Chowdhury, Subhasish M. & Sheremeta, Roman M., 2011. "Multiple equilibria in Tullock contests," Economics Letters, Elsevier, vol. 112(2), pages 216-219, August.
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    21. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
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    More about this item

    Keywords

    Meta-analysis; Contests; Experiments; Overbidding; Fractionalization;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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