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Public Leaderboard Feedback in Sampling Competition: An Experimental Investigation

Author

Listed:
  • Stanton Hudja

    (Purdue University)

  • Brian Roberson

    (Purdue University)

  • Yaroslav Rosokha

    (Purdue University)

Abstract

We investigate the role of performance feedback, in the form of a public leaderboard, in a sequential-sampling contest with costly observations. The player whose sequential random sample contains the observation with the highest value wins the contest and obtains a prize with a fixed value. We find that there exist parameter configurations such that in the subgame perfect equilibrium of contests with a fixed ending date (i.e., finite horizon), providing public performance feedback results in fewer expected observations and a lower expected value of the winning observation. We conduct a controlled laboratory experiment to test the theoretical predictions, and find that the experimental results largely support the theory. In addition, we investigate how individual characteristics affect competitive sequential-sampling activity. We find that risk aversion is a significant predictor of behavior both with and without leaderboard feedback, and that the direction of this effect is consistent with the theoretical predictions.

Suggested Citation

  • Stanton Hudja & Brian Roberson & Yaroslav Rosokha, 2019. "Public Leaderboard Feedback in Sampling Competition: An Experimental Investigation," Working Papers 19-34, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:19-34
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    File URL: https://digitalcommons.chapman.edu/esi_working_papers/299/
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    More about this item

    Keywords

    Innovation Competitions; Experiments; Contests;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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