Contests with Complementarities: Theory and Experiments

Abstract: This paper reports the results of laboratory experiments that are designed to test theoretical predictions in a multi-battle contest with geographic complementarities.  The specific setting is a game of Hex where control of each region is determined by a Tullock contest and the overall winner is determined by the combination of claimed regions.  We find that in a game with only a few regions, aggregate behavior across regions is largely consistent with the theoretical predictions.  However, examining individual level behavior suggests that bidders are not behaving in accordance with the model, but rather pursuing focused attacks.  This intuitive behavioral approach is also found to occur in larger games where the theory is undeveloped.