Many economic, political and social environments can be described as contests in which agents exert costly effort while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey provides a comprehensive review of experimental research on these three canonical contests. First, we review studies investigating the basic structure of contests, including the number of players and prizes, spillovers and externalities, heterogeneity, risk and incomplete information. Second, we discuss dynamic contests and multi-battle contests. Then we review studies examining sabotage, feedback, bias, collusion, alliances, group contests and gender, as well as field experiments. Finally, we discuss applications of contests and suggest directions for future research.

Competition between groups is ubiquitous in social and economic life, and typically occurs between groups that are not created equal. Here we experimentally investigate the implications of this general observation on the unfolding of symmetric and asymmetric competition between groups that are either homogeneous or heterogeneous in the ability of their members to contribute to the success of the group. Our main finding is that relative to the benchmark case in which two homogeneous compete against each other, heterogeneity within groups per se has no discernable effect on competition, while introducing heterogeneity between groups leads to a significant intensification of conflict as well as increased volatility, thereby reducing earnings of contest participants and increasing inequality. We further find that heterogeneous groups share the labor much more equally than predicted by theory, and that in asymmetric contests group members change the way in which they condition their efforts on those of their peers. Implications for contest designers are discussed.

This paper studies how subjects in a three-person sequential step-level public good game learn to punish free riders more over time. Our current work makes several additions to the literature on other regarding behavior. First, our experiment provides evidence that subjects care about the actions that lead to an outcome as well as the outcome itself, replicating the results of A. Falk, E. Fehr and U. Fischbacher (Economic Inquiry, in press), J. Brandts and C. Sola (Games and Economic Behavior, 36(2), 138-157, 2001.) and J.H. Kagel and K. Wolfe (Working paper, Ohio State University, 1999). Second, our experiment provides one of the first tests of the newer theories of reciprocity by A. Falk and U. Fischbacher (Working paper, University of Zurich, 2000) and G. Charness and M. Rabin (Quarterly Journal of Economics, in press) that take a psychological games approach. We find that these theories fail to explain the experimental data. Finally, we examine the mechanism by which subjects learn to punish free-riding more ofter over time.

We study the provision problem of an asymmetrically valued public project using a novel mechanism proposed by Van Essen and Walker (2017). Under this mechanism, each player simultaneously submits a price (either a contribution or a requested compensation) and a desired project quantity. In our context, two non-hosts interact with the project’s host, who gets harmed by provision. The minimum submitted quantity is provided if the contributions are sufficient to cover the building costs and the host’s requested compensation. We test the efficiency-enhancing effects of communication and find that, although it led to larger provided quantities, the probability of provision is unaffected, and the non-hosts kept most of the efficiency surplus. Moreover, the effect of communication disappears in settings where the host demands a larger compensation in equilibrium. The coding of chat logs reveals that veto threats are rare (1%), although the mechanism allows to do so. Reaching non-binding agreements and the host’s engagement with communication are positively correlated with the probability of provision.

One important determinant of voluntary contributions to public goods is the value of the public good relative to that of the forgone private good. Isaac, Walker and Thomas (1984) formalized this relation in the Marginal Per Capita Return (MPCR) and demonstrated its influence on the provision of linear public goods. This paper develops a parallel concept, in the context of a threshold public good, the Step Return (SR). After providing a meta-analysis of the effect of SR in previous experiments, we compare contributions in threshold public goods games with low, medium and high SRs. Results show that subjects respond to the SR in this setting just as they respond to the MPCR in the linear public goods setting: higher SRs lead to more contributions.

We use data from experiments on finitely repeated dilemma games with fixed matching to investigate the effect of different types of information on cooperation. The data come from 71 studies using the voluntary contributions paradigm, covering 122 data points, and from 18 studies on decision-making in oligopoly, covering another 50 data points. We find similar effects in the two sets of experimental games. We find that transparency about what everyone in a group earns reduces contributions to the public good, as well as the degree of collusion in oligopoly markets. In contrast, transparency about choices tends to lead to an increase in contributions and collusion, although the size of this effect varies somewhat between the two settings. Our results are potentially useful for policy making, because they provide guidance on the type of information to target in order to stimulate or limit cooperation.

Several studies have shown a relationship between the stocks of migrants and country-level investment in the home country; however the mechanism through which this relationship operates is still unexplored. We use a field experiment in which participants who are recent immigrants send information about risky decisions to others in their social network in their home country. The results demonstrate how this information influences decisions in the home country. We find that the advice given by family members and decisions made by friends significantly affects an individual’s risky decision-making.

How does the allocation of scarce jobs and production influence their supply? We present the results of a macroeconomics laboratory experiment that investigates the effects of alternative rationing schemes on economic stability. Participants play the role of worker-consumers who interact in labor and output markets. All output, which yields a reward to participants, must be produced through costly labor. Automated firms hire workers to produce output so long as there is sufficient demand for all production. In every period either output or labor hours are rationed. Random queue, equitable, and priority (i.e., property rights) rationing schemes are compared. Production volatility is the lowest under a priority rationing rule and is significantly higher under a scheme that allocates the scarce resource through a random queue. Production converges toward the steady state under a priority rule, but can diverge to significantly lower levels under a random queue or equitable rule where there is the opportunity for and perception of free-riding. At the individual level, rationing in the output market leads consumer-workers to supply less labor in subsequent periods. A model of myopic decision-making is developed to rationalize the results.

Non-monetary rewards are frequently used to promote pro-social behaviors, and these behaviors often result in approval from one’s peers. Nevertheless, we know little about how peer-approval, and particularly competition for peer-approval, influences people’s decisions to cooperate. This paper provides experimental evidence suggesting that people in peer-approval competitions value social approval more when it leads to unique and durable rewards. Our evidence suggests that such rewards act as a signaling mechanism, thereby contributing to the value of approval. We show that this signaling mechanism generates cooperation at least as effectively as cash rewards. Our findings point to the potential value of developing new mechanisms that rely on small non-monetary rewards to promote generosity in groups.

In this study we conduct a lab-in-the-field experiment with low-income Hispanics in three neighborhoods in a large city in the U.S. to investigate how identity and social exclusion influences individual contributions to fund local public goods. We find that while the strength of identity has a significant and positive impact on individual contributions to local public goods, the perception of social exclusion significantly decreases contributions. Our findings thus suggest factors that may impede full civic participation, and shed important light on potential policies to increase integration of immigrants and ethnic minorities into mainstream society.

We introduce a novel way to elicit individuals’ strength of altruistic motivation in the context of charitable donations, ranging from pure warm glow to pure altruism. Using the giving-type elicitation task of Gangadharan et al. (2018) and assuming that individuals maximise a Cobb–Douglas impure altruism utility function, as is used in Ottoni-Wilhelm et al. (2017), we can uniquely identify the strength of altruistic motivation for impure altruists, which is typically found to be the largest category of donors. We compare the introduced measure to an alternative survey-based elicitation from Carpenter (2021).

This paper analyses the institutional incentives and constraints of the Black Mouth Society – the traditional police of the pre-colonial Mandan and Hidatsa tribes – to understand how it successfully maintained social order without abusing power. The Black Mouth Society was a fraternal organization of middle-aged men that monitored and enforced rules created by the village council and chiefs. Two categories of institutions ensured reliable policing. First, on the front end, a long probationary period and system of unanimous consent facilitated the selection of reputable men who would wield policing power responsibly, reducing the chance of predation. However, individual Black Mouths occasionally abused their power. Therefore, on the back end, public communication created common knowledge, leading to social sanctions in the form of shame and restitution that punished abuses and limited further abuse. Thus, well-functioning self-governance, including reliable policing, is possible without a centralized state, as these tribes have demonstrated.

Political economists assume that global externalities, such as pandemics and climate change, require global or multi-national solutions. Yet, many aspects of these externalities can be addressed at the micro-level. As Elinor Ostrom pointed out, what scholars perceive as global externalities are in fact nested externalities that are organized in multiple, overlapping scales. By drawing on Ostrom's oeuvre, we explore the notions of nested externalities, polycentricity, and co-production in the context of pandemic governance. We highlight two crucial features of pandemics: first, preventative measures such as social distancing are co-production processes that cannot be provided by governments alone. Second, pandemics, much like climate change, pose nested externalities problems at different levels. Thus, pandemic externalities are better viewed as collective action problems arranged at multiple, nested, and/or overlapping scales. Finally, we propose an alternative institutional take that considers the nestedness of pandemic externalities and the diversity in institutional conditions across jurisdictions.

In benefit-cost analysis, fatality risk reductions are usually valued based on estimates of adults’ willingness to pay for changes in their own risks, regardless of whether the risk reduction accrues to adults or children. This approach reflects the relatively large number of valuation studies that address adults; however, the literature on children is growing. We review these studies, focusing on those that estimate values for both adults and children using a consistent approach to limit the effects of between-study variability. We rely on explicit selection criteria to identify studies that measure reasonably comparable outcomes and are candidates for application to analyses of U.S. policies. The ratio of values for children to values for adults ranges from 0.6 to 2.9; however, most estimates are greater than 1.5. Although some studies suggest that the divergence between child and adult values decreases as the child ages, this finding is not universal. We conclude that analysts should test the sensitivity of their results to the use of higher values for children than adults. Additional empirical research is needed to support more precise estimates of the variation in values by age that can be featured in the primary analysis.

Investing in global health and development requires making difficult choices about what policies to pursue and what level of resources to devote to different initiatives. Methods of economic evaluation are well established and widely used to quantify and compare the impacts of alternative investments. However, if not well conducted and clearly reported, these evaluations can lead to erroneous conclusions. Differences in analytic methods and assumptions can obscure important differences in impacts. To increase the comparability of these evaluations, improve their quality, and expand their use, this special issue includes a series of papers developed to support reference case guidance for benefit-cost analysis. In this introductory article, we discuss the background and context for this work, summarize the process we are following, describe the overall framework, and introduce the articles that follow.

The estimates used to value mortality risk reductions are a major determinant of the benefits of many public health and environmental policies. These estimates (typically expressed as the value per statistical life, VSL) describe the willingness of those affected by a policy to exchange their own income for the risk reductions they experience. While these values are relatively well studied in high-income countries, less is known about the values held by lower-income populations. We identify 26 studies conducted in the 172 countries considered low- or middle-income in any of the past 20 years; several have significant limitations. Thus there are few or no direct estimates of VSL for most such countries. Instead, analysts typically extrapolate values from wealthier countries, adjusting only for income differences. This extrapolation requires selecting a base value and an income elasticity that summarizes the rate at which VSL changes with income. Because any such approach depends on assumptions of uncertain validity, we recommend that analysts conduct a standardized sensitivity analysis to assess the extent to which their conclusions change depending on these estimates. In the longer term, more research on the value of mortality risk reductions in low- and middle-income countries is essential.

Advances in theoretical and computable general equilibrium modeling brought their conceptual foundations more in line with standard microeconomic constructs. This reduced the theoretical gap between welfare measurements using a partial or a general equilibrium approach. However, the separation of the partial and general equilibrium literatures lingers in many applications that this manuscript seeks to bridge. The now shared conceptual foundations, the importance of functional specification, the role of common price movements and closure rules are discussed. The continuing stricture in U.S. Government guidelines against including secondary effects in welfare measures is questioned.

This study is the eighth in a series of stated-preference studies designed to enhance the basis for international benefits transfer of value of statistical life (VSL) estimates. The series has fielded essentially similar stated-preference surveys in Canada, China, France, Italy, Japan, Mongolia, the United Kingdom, and the United States. This Chinese study estimates the willingness to pay for contemporaneous and future mortality risk reductions of residents of Shanghai, Jiujiang, and Nanning, China using a stated-preference payment-card survey. The pooled VSL for a contemporaneous reduction in annual mortality risk reduction of 5 in 10,000 is about 1.47 million 2009 yuan ($614,805 U.S. $2016), with income elasticities of 0.2 to 0.25. This VSL estimate is at the lower end of estimates from the eight countries, between those from Mongolia and Japan, and in the mid-range of estimates of willingness to pay (WTP) for mortality risk reductions as a percentage of household income. We find lower discount rates in the Mongolia, Japan, and China studies than in those fielded in North America or Europe. The study also explores the relative performance of dichotomous choice and stated-preference card elicitation methods in a middle income country setting and develops a computerized “payment card” that allows testing for anchoring. Implicit transfer elasticities across countries, calculated using the VSLs we estimate and each country’s income, relative to those of the United States, yields estimates of 0.88–0.95 for the lower income countries. These compare with the default assumption of 1.0 or assumed elasticities of 1.2 for developing countries.

The value of small changes in mortality risks, generally expressed as the value per statistical life, is an important parameter in benefit-cost analysis. However, little is known about the values held by populations in low- and middle-income countries. This article introduces a symposium that includes three additional articles which explore related theory and research.

We investigated the perceived value of government programs on early-childhood development as a means of reducing childhood poverty. We incorporated preferences for the process as well as the outcome by developing two stated-preference survey instruments. One survey directly elicited respondents’ willingness to pay specifically for high-quality, intensive, early-childhood development programs at federal and state levels. A second survey elicited respondents’ preferences for increasing or decreasing taxes and reallocating expenditures between other government programs and early-childhood programs. We found that respondents cared greatly about how childhood poverty was reduced, not just reducing poverty per se. The perceived effectiveness of a program and ideological perspective were found to be important determinants of preferences for a poverty-reduction program. Respondents across all groups, including conservatives and respondents who perceived the effectiveness of early-childhood programs to be low, were not in favor of reducing the early-childhood program.