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We apply the die rolling experiment of Fischbacher and Föllmi-Heusi (2013) to a two-player tournament incentive scheme. Our treatments vary the prize spread. The data highlights that honesty is more pronounced when the prize spread is small.
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In this paper, we demonstrate that the existence of sequential equilibria may depend on the players holding beliefs which are tailored to the respective equilibrium but otherwise difficult to justify. We also discuss potential remedies.
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