We experimentally investigate the effect of social identification and information feedback on individual behavior in contests. Identifying subjects through photo display decreases efforts. Providing information feedback about others’ effort does not affect the aggregate effort levels but it does change the dynamics of individual behavior. We develop a behavioral model based on relative payoff maximization, and use it to estimate the degree of pro-social/status-seeking behavior. We find that decrease in ‘social distance’ between group members through photo display promotes pro-social behavior. Information feedback reduces the within-group volatility in effort level and facilitates greater adherence to the ‘group norm.’ Finally, in contrast to standard theoretical predictions, we find significant over-expenditure of efforts in all treatments. This overdissipation can be explained by a combination of non-monetary utility of winning and relative payoff maximization.
Mago, S.D., Savikhin, A.C., & Sheremeta, R.M. (2012). Facing your opponents: Social identification and information feedback in contests. ESI Working Paper 12-15. Retrieved from http://digitalcommons.chapman.edu/esi_working_papers/74