Inequality and Competitive Effort : The Roles of Asymmetric Resources, Opportunity and Outcomes

We investigate how individuals react to different types of asymmetries in experimental two-player Tullock contests where contestants expend resources to win a prize. We study three different sources of asymmetry: abilities, resources and possible outcomes. We find that overall competitive effort is greater in the presence of asymmetric abilities than other inequalities. Unlike other forms, asymmetry in abilities elicits a very aggressive reaction from disadvantaged players relative to their advantaged opponents. The Quantal Response Equilibrium (QRE) suggests that financial incentives are less salient in the presence of a biased contest procedure. Moreover, despite similar average efforts, contestants with an advantage in ability mostly play a ‘safe' strategy that secures a higher likelihood of winning the contest, while other advantaged players strategically adapt their efforts to those of their opponents