Abstract
Two players enter a contest over common prize with same marginal cost of effort but asymmetric productivity of effort. When this productivity is unknown, contest outcome is used as a signal of productivity. So, the player who wins the first few rounds emerges as a winner and the contest efforts converge to zero. The theoretical results are confirmed in a laboratory experiment. The model is seen as a driver in the success of colonization such that colonies submitted after a few initial defeats. A historical account of British colonization of India is discussed in this light.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
KEYWORDS
Identity, Contest, Information Cascade, Colonization
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