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

Research output: Contribution to journalArticle

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.

Details

Authors
Organisations
External organisations
  • Uppsala University
  • Research Institute of Industrial Economics
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics
Original languageEnglish
Pages (from-to)169-183
JournalEconomic Inquiry
Volume58
Issue number1
Publication statusPublished - 2020 Jan 1
Publication categoryResearch
Peer-reviewedYes