Abstract
We study endogenous group formation in tournaments employing experimental three-player contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending effort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower effort. Anticipation of this exploitation may explain their preference to stand alone.
| Item Type: | Paper |
|---|---|
| Form of publication: | Preprint |
| Keywords: | Endogenous group formation, contest, conflict, alliance, experiment, moral hazard problem, free-riding, in-group favoritism |
| Faculties: | Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A2 - Konflikte in Organisations- und Steuerungsproblemen Economics Economics > Chairs > MPI for Tax Law and Public Finance |
| Subjects: | 300 Social sciences > 330 Economics |
| JEL Classification: | D72, D74 |
| URN: | urn:nbn:de:bvb:19-epub-17245-1 |
| Language: | English |
| Item ID: | 17245 |
| Date Deposited: | 10. Oct 2013 11:25 |
| Last Modified: | 04. Nov 2020 12:59 |
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