Working Paper No. 1149

Grind or Gamble? An Experimental Analysis of Effort and Spread Seeking in Contests

Published: January 11, 2017Pages: 65Keywords: Contest; Risk; Spread; Incentives; Institutional Choice, ExperimentJEL-codes: C70; D80; D02; D03

Grind or Gamble? An Experimental Analysis of Effort and Spread Seeking in Contests Ola Andersson, Håkan J. Holm and Erik Wengström


We conduct a contest experiment where participants can invest in increasing both the mean and the spread of an uncertain performance variable. Subjects are treated with different prize schemes and in accordance with theory we observe substantial investments in spread. We find that both types of investments can be controlled with a three level prize scheme. However, the control is imperfect and behavior is characterized by inertia. The winner-take-all prize scheme has many disadvantages including high spread and heterogeneous behavior. The scheme where only one loser is punished appears superior; it generates high mean, low spread and is most popular.

Ola Andersson

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Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?

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