This paper studies a class of games, quot;All-Pay Contestsquot;, which captures general asymmetries and sunk investments inherent in scenarios such as lobbying, competition for market power, labor-market tournaments, and Ramp;D races. Players compete for one of several identical prizes by...

Tournaments consisting of iterative matches are a common mechanism for determining how to allocate a prize. For this reason it is important to understand the behavioral as well as the theoretical properties of different tournament structures. Given that laboratory experiments have consistently...

We consider a multi-stage game where firms first choose product quality and then compete for sales in the product market. We show how the equilibrium qualities are influenced by timing (sequential or simultaneous) of quality choices depends on the type of competition (Bertrand or Cournot) in the...

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants' efforts are significantly higher than predicted by the standard...

We conduct a contest experiment where 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 substantial investments in spread. We find that both types of...

We examine experimentally how link costs affect the formation of links between a single seller and two potential buyers as well as the ensuing bargaining. Theory predicts that link costs lead to less competitive networks, with one link rather than two links, and that link costs do not affect the...

In financial markets, clients entrust their capital and data to financial infrastructure providers who are vulnerable to breaches. We develop a model in which infrastructure providers compete to provide secure and efficient client services, in the presence of a cyber-attacker. In equilibrium,...

We report an experimental test of alternative rules in innovation contests when success may not be feasible and contestants may learn from each other. Following Halac et al. (forthcoming), the contest designer can vary the prize allocation rule from Winner-Take-All in which the first successful...

In this paper we use the theory of social situations (TOSS) to examine the stability in advertising and (price) competition games. In this context, we derive the interesting result that with endogenous and exogenous advertising the incumbent need not maintain a hungry-look, i.e.,...

This paper provides a means for properly comparing demand and inverse demand for a product when the number of firms in the analysis is expanded beyond the duopoly case. To do this, first an index for the ease of substitution was derived for inverse demand systems, and then demand systems, that...