Asymmetric discouragement in asymmetric contests

Abstract

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Heterogeneity, Leveling the Playing Field, and Affirmative Action in Contests

“…However, introducing heterogeneous budgets reduces total effort compared to the homogeneous case. March and Sahm (2017) find evidence supporting the discouragement effect in the laboratory, although this effect is not statistically significant for the strong players. The authors explain this result with disappointment aversion.…”

Contests as selection mechanisms: The impact of risk aversion

“…Fonseca, 2009, Anderson and Freeborn, 2010, Kimbrough et al, 2014. March and Sahm (2017) discusses the contribution to this literature in greater detail.…”

“…Moreover, we find an asymmetric discouragement effect in the sense that subjects bid less in treatment Asymmetric than in treatment Symmetric, if they have the low ability, but not if they have the high ability. March and Sahm (2017) To map our findings on the venturesome's probability of winning on effort levels, we estimate panel regression models of the relative effort levels, i.e. effort divided by the size of the prize.…”

Essays on incentives and cooperation in Tullock contests : an experimental approach

“…He showed that the equilibrium effort ratio is equal to the valuation ratio and that the prize dissipation ratios for the players are the same. March and Sahm (2017) provide experimental evidence on the discouragement effect on effort exerted in rent-seeking contest in which players have asymmetric abilities. Compared to symmetric contests, subjects invest the same amount of effort when fighting against a weaker opponent.…”

“…He measured the changes in equilibrium effort levels when players value the prize differently or when their relative abilities are different. March and Sahm (2017) provide experimental evidence on the discouragement effect on efforts expended in rent-seeking contests with asymmetric abilities. The results show that, compared to a contest in which players have symmetric abilities, players decrease their efforts in an asymmetric contest in which they are paired with a stronger competitor.…”