An experimental study of sorting in group contests

Date: 2015-12
By: Philip Brookins (Department of Economics, Florida State University)
John P. Lightle (Department of Economics, Virginia Commonwealth University)
Dmitry Ryvkin (Department of Economics, Florida State University)
URL: http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2015_12_02&r=net
We experimentally explore the effects of sorting and communication in lottery contests between groups of heterogeneous players whose within-group efforts are perfect complements. Subjects are assigned a type — A, B, C or D — that determines their cost of effort, with A having the lowest cost and D the highest cost, and are then assigned to one of the two two-player groups competing in the contest. Theory predicts that aggregate contest output increases in the variation in abilities between groups, i.e., the output is maximized by the most unbalanced sorting of players into groups — (A,B) vs. (C,D) — and minimized by the most balanced sorting — (A,D) vs. (B,C). That is, the equilibrium prediction goes against the “competitive balance" heuristic. In the absence of communication, this prediction is directionally confirmed, although the effect is not statistically significant. In the presence of within-group communication, however, we find that total output is 33% higher under the balanced sorting as compared to the unbalanced sorting — a reversal of the prediction, but in line with the heuristic. This result is driven by an increase in output by (B,C) groups under the balanced sorting and a strong decrease in output by the underdog (C,D) groups under the unbalanced sorting, relative to no communication. These results are at odds with previous studies that find that within-group communication always increases output, and suggest that the effect of communication depends strongly on the configuration of heterogeneity between and within groups. Competitive balance is confirmed as a robust sorting heuristic for sustaining competition and high effort provision in group contests.
Keywords: group contest, sorting, complementarity, heterogeneous players, experiment
JEL: C72 C91 D72 M54
廣告

An experimental study of sorting in group contests

YNY: 這是一篇比較 group 之組成成員能力不同下, 所形成 overbidding 的實驗文獻。

Date: 2014-01
By: Philip Brookins (Department of Economics, Florida State University)
John Lightle (Department of Economics, Florida State University)
Dmitry Ryvkin (Department of Economics, Florida State University)
URL: http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2014_01_01&r=net
We study experimentally the effects of sorting in contests between groups of heterogeneous players whose within-group efforts are perfect substitutes. The theory predicts that higher aggregate effort will be reached when variation in ability between groups is lower, i.e., by a more balanced sorting. In the experiment, we assign subjects to four types — A, B, C, and D — ranked by their cost of effort, with A having the lowest and D having the highest cost, and conduct contests between two groups of two players each. In the Balanced treatment, (A,D) groups (i.e., groups comprised of a type A and a type D player) compete with (B,C) groups, whereas in the Unbalanced treatment, (A,B) groups compete with (C,D) groups. We find substantial heterogeneity and overinvestment of efforts by all types in both treatments, including the “underdog" (C,D) group which surprisingly is not demoralized by the unbalanced matching. Despite strong overbidding, relative aggregate efforts are remarkably close to equilibrium predictions both between treatments and between groups within each treatment. The results confirm the prediction that balanced sorting leads to higher aggregate effort.
Keywords: contest, group, sorting, heterogeneous players, experiment
JEL: C72 C91 M54 D72