Hostname: page-component-54dcc4c588-42vt5 Total loading time: 0 Render date: 2025-09-12T10:55:30.527Z Has data issue: false hasContentIssue false
  • English
  • Français

Indefinitely repeated contests with incumbency advantage

Published online by Cambridge University Press:  01 January 2025

Cary Deck ,
Zachary Dorobiala Open the ORCID record for Zachary Dorobiala [Opens in a new window]  and
Paan Jindapon
Cary Deck
Affiliation:
Department of Economics, Finance, and Legal Studies, The University of Alabama, Tuscaloosa, AL 35487, USA
Zachary Dorobiala*
Affiliation:
Department of Economics, Finance, and Legal Studies, The University of Alabama, Tuscaloosa, AL 35487, USA
Paan Jindapon
Affiliation:
Department of Economics, Finance, and Legal Studies, The University of Alabama, Tuscaloosa, AL 35487, USA
*
zdorobiala@crimson.ua.edu
Get access Rights & Permissions [Opens in a new window]

Abstract

We study an indefinitely repeated Tullock contest in which the stage-game winner gains an incumbency advantage in the next stage-game. The incumbent's advantage allows the incumbent to carry over a proportion of their expenditure in the previous contest to the next contest. Theoretically, this advantage is not predicted to have a large impact on total expenditure. However, in a controlled laboratory experiment, we find the incumbency advantage increases total expenditure by a significant amount. Further, we find that carryover has a discouraging effect on challengers while encouraging incumbents react in a retaliatory manner.

Keywords

Infinitely repeated gamesTullock contestsIncumbency advantageLaboratory experiments

JEL classification

C91: Laboratory, Individual Behavior D72: Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior C72: Noncooperative Games

Information

Type
Original Paper
Information
Journal of the Economic Science Association , Volume 10 , Issue 2: Special Issue: Behavioral and Experimental Economics for Innovative Policy-Making (Articles 1 to 3) , December 2024 , pp. 232 - 254
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2024.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Arellano, M, Bond, S. (1991). Some tests of specification for panel data: MonteCarlo evidence and an application to employment equations. Review of Economic Studies, 58, 2, 277–297. 10.2307/2297968.Google Scholar
Azrieli, Y, Chambers, C, Healy, P. (2020). Incentives in experiments with objective lotteries. Experimental Economics, 23, 1, 1–29. 10.1007/s10683-019-09607-0.Google Scholar
Baik, KH, Lee, S. (2000). Two-stage rent-seeking contests with carryovers. Public Choice, 103, 3–4, 285–296. 10.1023/A:1005003713923.Google Scholar
Brookins, P, Ryvkin, D, Smyth, A. (2021). Indefinitely Repeated Contests: An Experimental Study. Experimental Economics, 24, 1390–1419. 10.1007/s10683-021-09703-0.Google Scholar
Cooper, R, Dejong, D, Forsythe, R, Ross, T. (1996). Cooperation without Reputation: Experimental Evidence from Prisoner's Dilemma Games. Games and Economic Behavior, 12, 2, 187–218. 10.1006/game.1996.0013.Google Scholar
Dal Bo, P, Frechette, GR. (2018). On the Determinants of Cooperation in Infinitely Repeated Games: A Survey. Economic Literature, 56, 1, 60–114. 10.1257/jel.20160980.Google Scholar
Dechenaux, E, Kovenock, D, Sheremeta, RM. (2015). A survey of experimental research on contests, all-pay auctions and tournaments. Experimental Economics, 18, 4, 609–669. 10.1007/s10683-014-9421-0.Google Scholar
Descamps, A, Ke, C, Page, L. (2022). How success breeds success. Quantitative Economics, 5, 1, 355–385. 10.3982/QE1679.Google Scholar
Fischbacher, U. (2007). z-Tree: Zurich toolbox for ready-made economic experiments. Experimental Economics, 10, 2, 171–178. 10.1007/s10683-006-9159-4.Google Scholar
Gill, D, Prowse, V. (2014). Gender differences and dynamics in competition: The role of luck. Quantitative Economics, 5, 2, 351–376. 10.3982/QE309.Google Scholar
Grossmann, M, Dietl, H, Lang, M. (2010). Revenue sharing and competitive balance in a dynamic contest model. Review of Industrial Organization, 36, 1, 17–36. 10.1007/s11151-009-9236-x.Google Scholar
Hafer, C. (2006). On the origins of property rights: Conflict and production in the state of nature. Review of Economic Studies, 73, 119–143. 10.1111/j.1467-937X.2006.00371.x.Google Scholar
Häfner, Samuel, Nöldeke, Georg. (2019). Sorting in iterated incumbency contests. Economic Theory, 10.1007/s00199-019-01205-8.Google Scholar
Ham, JC, Kagel, JH, Lehrer, SF. (2005). Randomization, endogeneity and laboratory experiments: The role of cash balances in private value auctions. Journal of Econometrics, 125, 1–2, 175–205. 10.1016/j.jeconom.2004.04.008.Google Scholar
Holtz-Eakin, D, Newey, W, Rosen, HS. (1988). Estimating vector autoregressions with panel data. Econometrica, 56, 6, 1371–1395. 10.2307/1913103.Google Scholar
Konrad, KA. (2009). Strategy and Dynamics in Contests, Oxford University Press. 10.1093/oso/9780199549597.001.0001.Google Scholar
Polborn, M. (2006). Investment under uncertainty in dynamic conflicts. Review of Economic Studies, 73, 505–529. 10.1111/j.1467-937X.2006.0385.x.Google Scholar
Schmitt, P, Shupp, R, Swope, K, Cadigan, J. (2004). Multi-period rent-seeking contests with carryover: Theory and experimental evidence. Economics of Governance, 5, 3, 187–211. 10.1007/s10101-004-0075-9.Google Scholar
Virág, G. (2009). Efficiency and competition in the long run: The survival of the unfit. Games and Economic Behavior, 67, 1, 315–330. 10.1016/j.geb.2008.10.008.Google Scholar
Windmeijer, F. (2005). A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics, 126, 1, 25–51. 10.1016/j.jeconom.2004.02.005.Google Scholar