Suchergebnisse

We study a model of imperfectly discriminating contests with two ex ante symmetric agents. We consider four institutional settings: Contestants move either sequentially or simultaneously and in addition their types are either public or private information. We find that an effort-maximizing designer of the contest prefers the sequential to the simultaneous setting from an ex ante perspective. Moreover, the sequential contest Pareto dominates the simultaneous one when the contestants' types are sufficiently negatively correlated. Regarding the information structure, the designer ex ante prefers private information while the contestants prefer public information. Adapted from the source document.

AbstractStandard economic models have long been applied to choices over private consumption goods, but have recently been extended to incorporate social situations as well. We challenge the applicability of standard decision-theoretic models to social settings. In an experiment where choices affect the payoffs of someone else, we find that a large fraction of subjects prefer randomization over any of the deterministic outcomes. This tendency prevails whether the other party knows about the choice situation or not. Such randomization violates standard decision theory axioms that require that lotteries are never better than their best deterministic component. For conceptually similar choices in classical non-social situations, we do not find much evidence for such violations, suggesting the need for theories of uncertainty that are targeted to social settings.