Self-selection Into Contests
John Morgan (University of California, Berkeley, United States)

We study self-selection into contests among a large population of heterogeneous agents. We show that entry into the “richer” contest (in terms of show-up fees, number or value of prizes) is non-monotone in ability. Entry into the more meritocratic (i.e., discriminatory) contest exhibits two interior extrema. Other testable predictions of our model are: 1) All else equal, the more meritocratic contest is “exclusive,” i.e., it attracts only a minority of the population; 2) Agents of very low ability disproportionately enter the more meritocratic contest; 3) Making a contest more meritocratic, or raising the value of prizes, may lower the average ability of entrants. Offering a higher show-up fee may lower entry. Joint with Dana Sisak and Felix Várdy.

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Trading Places: An Experimental Comparison of Reallocation Mechanisms for Priority Queuing
Sander Onderstal (University of Amsterdam)

In a laboratory experiment, we compare two auction mechanisms that determine the sequence of service to queued customers. Two innovative experimental protocols are used to examine queuing behavior in a laboratory environment. We find that on average, the server-initiated auction and the customer-initiated auction perform equally well in terms of efficiency gain. Moreover, subjects indicate that they find the server-initiated auction a fairer mechanism than the customer-initiated auction. When voting between the two auctions, subjects tended to favor the server-initiated auction. We consider both sunk-cost effects and endowment effects to explain behavioral deviations from standard theory predictions. Joint with Anouar El Haji.