Abstract
Research tournaments are predicted to encourage R&D. Recent theoretical developments in research tournaments are grounded in search theory. Although the economic intuition behind tournaments is straightforward, computing equilibrium strategies is complex. The participants compute a stopping rule based on the number of participants, the prize and the cost of research. It is an empirical question whether agents will behave as predicted or will employ simple “rule of thumb” strategies such as taking a predetermined number of draws. This paper reports the results of a series of laboratory experiments designed to test the predictions of the search model of tournaments. (JEL C9, D8)
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