Working Paper
Asymmetric Discouragement in Asymmetric Contests
Christoph March, Marco Sahm
CESifo, Munich, 2016
CESifo Working Paper No. 6108
CESifo, Munich, 2016
CESifo Working Paper No. 6108
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.
CESifo Category
Behavioural Economics
Public Choice
Behavioural Economics
Public Choice
Keywords: asymmetric contest, discouragement effect, disappointment aversion, laboratory experiment
JEL Classification: C720, C920, D720