Enlarging the market yet decreasing the profit: An experimental study of competitive behavior when investment affects the prize

Author:

Hart Einav,Avrahami Judith,Kareev Yaakov

Abstract

AbstractIn many competitive situations, our investments increase our gains: Developing better products or research proposals may lead to higher contracts or patents or larger grants. Does increasing investment in such cases always guarantee higher gains? We used an experimental repeated competition game in which prizes depended on contestants’ investments (n=108). Contestants invested more when they increased the potential prize (“enlarge the market”), yet in some cases this tendency was counterproductive (“decrease the profit”): Contestants in fact diminished their earnings, compared to sitting out the competition and keeping their initial funds. Moreover, when a contestant’s investment decreased an opponent’s prize, the contestant tended to invest less; this effect, in turn, led to higher overall gains for both contestants. This result implies that prosocial considerations are at play. Notably, in certain situations, excessive competitive tendencies may lead to a larger waste of resources.

Publisher

Cambridge University Press (CUP)

Subject

Economics and Econometrics,Applied Psychology,General Decision Sciences

Cited by 1 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3