Asymmetric discouragement in asymmetric contests

Faculty/Professorship: Economic Theory  
Author(s): March, Christoph  ; Sahm, Marco  
Title of the Journal: Economics Letters
ISSN: 0165-1765
Publisher Information: Amsterdam [u.a.] : Elsevier
Year of publication: 2017
Volume: 151
Pages: 23-27
Language(s): English
DOI: 10.1016/j.econlet.2016.11.032
We provide new experimental evidence which suggests an asymmetric discouragement effect in lottery contests with heterogeneous abilities. Compared to a symmetric contest, subjects invest less effort when facing a stronger opponent, but they invest the same when facing a weaker opponent. Our results can be explained by a simple model of disappointment aversion.
Keywords: Asymmetric contest, Discouragement effect, Disappointment aversion, Laboratory experiment
Peer Reviewed: Ja
International Distribution: Ja
Type: Article
Year of publication: 28. June 2018