| This dissertation studies behavior in basic Tullock--type contests. First, it illustrates behavioral differences observed in earlier laboratory experimental studies. Then, the results from two sets of experiments are reported. The first set of experiments deviates from previous research by incorporating a series of two--person contests in which subjects decide on their effort levels after learning of the effort levels of their opponents. The effort levels of the opponents systematically change across decision rounds so that the data gathered presents the responses of subjects to all possible choices of their opponents and therefore allows estimation of subjects' "response functions." Elimination of uncertainty regarding opponents' actions is predicted to result in behavior more consistent with optimal choice theory based on earnings maximization. In general, however, observed response functions are not consistent with model predictions. On average, subjects overinvest relative to the risk--neutral expected utility maximizing levels. The second set of experiments reported in this dissertation examines the effect of resource endowment on effort levels in simultaneous--move contests. The results support the hypothesis that an increase in resource endowment affects behavior in contests, but not uniformly at all levels of endowment. |
