Entry in contests with incomplete information: Theory and experiments

Diego Aycinena, Lucas Rentschler

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

This paper studies entry decisions in contests with private values. Potential contestants observe their value and the common opportunity cost of entry, and make entry decisions simultaneously. Theory predicts that whether or not contestants are informed of the number of entrants prior to choosing their expenditures has no effect on entry or aggregate expenditures. We test these assertions in our experiments. We find substantial over-entry in both information structures. However, entry is higher when contestants are informed. Since expenditures do not, on average, differ across information structures, aggregate expenditure is also higher when contestants are informed. Contestants earn on average less than the opportunity cost of entry.

Original languageEnglish (US)
Article number101803
JournalEuropean Journal of Political Economy
Volume60
DOIs
StatePublished - Dec 2019

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Political Science and International Relations

Fingerprint Dive into the research topics of 'Entry in contests with incomplete information: Theory and experiments'. Together they form a unique fingerprint.

Cite this