Information Disclosure in Contests with Endogenous Entry: An Experiment

• 成果类型: Article
• 署名作者: Boosey, Luke; Brookins, Philip; Ryvkin, Dmitry
• 署名单位: State University System of Florida; Florida State University; University of South Carolina System; University of South Carolina Columbia; Max Planck Society; Harvard University; Harvard University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3488
• 发表日期: 2020
• 页码: 5128-5150
• 关键词: Contest; endogenous entry; information disclosure; experiment

摘要

We use a laboratory experiment to study the effects of disclosing the number of active participants in contests with endogenous entry. At the first stage, potential participants decide whether to enter competition, and at the second stage, entrants choose their investments. In a 2x2 design, we manipulate the size of the outside option, omega, and whether the number of entrants is disclosed between the stages. Theory predicts more entry for lower omega and the levels of entry and aggregate investment to be independent of disclosure in all cases. We find empirical entry frequencies decreasing with.. For aggregate investment, we find no effect of disclosure when omega is low but a strong positive effect of disclosure when omega is high. The difference is driven by substantial overinvestment in contests with a small, publicly known number of players contrasted by more restrained investment in contests in which the number of players is uncertain and may be small. The behavior under disclosure is explained by a combination of joy of winning and entry regret.