Andrew J. Yates

Best-of-Three Contest Experiments: Strategic Versus Psychological Momentum

We conduct an experimental analysis of a best-of-three contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The patterns of players’ efforts and the probability that a contest ends in two rounds are consistent with ‘strategic momentum’, i.e., momentum generated due to strategic incentives inherent in the contest. We do not find evidence for ‘psychological momentum’, i.e., momentum which emerges when winning affects players’ confidence. Similar to previous studies of contests, we find significantly higher efforts than predicted and strong heterogeneity in effort between subjects.

Testing Contest Theory: Evidence from Best-of-Three Tennis Matches

We study strategic choice of effort in best-of-three contests between equally skilled players. Economic theory predicts such contests are more likely to end in two rounds than in three. If, however, a contest reaches a third round, each player is equally likely to win. We test these predictions with data from professional tennis matches, using betting odds to identify equally skilled opponents. The empirical results support the theoretical predictions, suggesting players strategically adjust efforts during a best-of-three contest.

Best-of-Three Contests: Experimental Evidence

We conduct an experimental analysis of a best-of-three Tullock contest. Intermediate prizes lead to higher efforts, while increasing the role of luck (as opposed to effort) leads to lower efforts. Both intermediate prizes and luck reduce the probability of contest ending in two rounds. The patterns of players? efforts and the probability that a contest ends in two rounds is consistent with „strategic momentum?, i.e. momentum generated due to strategic incentives inherent in the contest. We do not find evidence for „psychological momentum?, i.e. momentum which emerges when winning affects players? confidence. Similar to previous studies of contests, we find significantly higher efforts than predicted and strong heterogeneity in effort between subjects.

The Knowledge Problem, Entrepreneurial Discovery, and Austrian Market Process Theory

Abstract Using a stylized model of the used car market, we extend the formal theory of the Austrian market process in three directions. First, we incorporate the knowledge problem and entrepreneurial alertness for the discovery of previously unknown information. Second, we allow for the possibility that entrepreneurs may make mistakes. Third, we describe the effect of entrepreneurial behavior on disequilibrium market adjustment. We give conditions under which an equilibrium exists for an Austrian market process with these elements and we analyze the stability properties of the equilibrium. Furthermore, we show that the model has interesting welfare properties—a commodity tax may increase or decrease welfare. Journal of Economic Literature Classification Number: D50

Optimal pollution permit endowments in markets with endogenous emissions

Abstract In a permit market with endogenous emissions, both firms and citizens purchase permits. Presented here are static and dynamic models of pollution permit markets with endogenous emissions. The optimal permit endowments are characterized when the regulator faces uncertainty about damages and uncertainty about the severity of the citizens’ collective action problem. Due to the possibility of learning over time, the regulator issues a larger number of permits in the first period of the dynamic model than in the static model.

Rent-setting in multiple winner rent-seeking contests

Abstract In this paper, we analyze a multiple winner rent-seeking contest where the number of winners is set by a self-interested regulator. The winners receive a license to compete in a market. The structure of competition in the market influences the number of winners through the preferences of the regulator. The model indicates that Cournot competitors can be better off than firms that are able to collude on output determination.

Damages and Expected Deaths Due to Excess NOx Emissions from 2009 to 2015 Volkswagen Diesel Vehicles

We estimate the damages and expected deaths in the United States due to excess emissions of NOx from 2009 to 2015 Volkswagen diesel vehicles. Using data on vehicle registrations and a model of pollution transport and valuation, we estimate excess damages of

Should Consumers Be Priced Out of Pollution-Permit Markets?

430 million and 46 excess expected deaths. Accounting for uncertainty about emissions gives a range for damages from

Optimizing the scale of markets for water quality trading

350 million to

Crime on the Court: A Correction

500 million, and a range for excess expected deaths from 40 to 52. Our estimates incorporate significant local heterogeneity: for example, Minneapolis has the highest damages despite having fewer noncompliant vehicles than 13 other cities. Our estimated damages greatly exceed possible benefits from reduced CO2 emissions due to increased fuel economy.