That’s the ticket: explicit lottery randomisation and learning in Tullock contests

Chowdhury, S. M., Mukherjee, A. ORCID: https://orcid.org/0000-0001-7566-6526 and Turocy, T. L. (2020) That’s the ticket: explicit lottery randomisation and learning in Tullock contests. Theory and Decision, 88 (3). pp. 405-429. ISSN 0040-5833 doi: 10.1007/s11238-019-09731-6

Abstract/Summary

Most laboratory experiments studying Tullock contest games find that bids significantly exceed the risk-neutral equilibrium predictions. We test the generalisability of these results by comparing a typical experimental implementation of a contest against the familiar institution of a ticket-based raffle. We find that in the raffle (1) initial bid levels are significantly lower and (2) bids adjust more rapidly towards expected-earnings best responses. We demonstrate the robustness of our results by replicating them across two continents at two university labs with contrasting student profiles.