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Contest and resource allocation: An experimental analysis of entitlement and self-selection effects

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  • Čellárová, Katarína
  • Staněk, Rostislav
Abstract
Leaders who decide the allocation of resources are often chosen through contests. Due to imperfect monitoring, they often decide to allocate resources to themselves at the expense of others. This paper investigates how being selected in a contest affects such allocation through two channels: entitlement and self-selection effects. In our experiment, two players compete for the right to allocate resources between themself and a third, uninvolved player. We identify the entitlement effect by comparing the choices of participants who participated in the contest with those who were chosen randomly. Self-selection effect is identified by comparing the choices of winners and losers between treatments via a difference-in-difference approach. We find a significant effect of entitlement; people participating in the contest transfer fewer resources to the third player compared to those who did not participate. Further, we find no evidence that the people with specific distributional preferences self-select into the leaders’ role. Our findings suggest that the primary reason leaders allocate resources to themselves is their involvement in the contest rather than being a result of self-selection.

Suggested Citation

  • Čellárová, Katarína & Staněk, Rostislav, 2024. "Contest and resource allocation: An experimental analysis of entitlement and self-selection effects," European Journal of Political Economy, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:poleco:v:82:y:2024:i:c:s0176268024000284
    DOI: 10.1016/j.ejpoleco.2024.102526
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    More about this item

    Keywords

    Entitlement effect; Self-selection; Contest; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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