New Hampshire Effect: behavior in sequential and simultaneous multi-battle contests

  • Shakun D. Mago
  • Roman M. Sheremeta
Original Paper


Sequential multi-battle contests are predicted to induce lower expenditure than simultaneous contests. This prediction is a result of a “New Hampshire Effect”—a strategic advantage created by the winner of the first battle. Although our laboratory study provides evidence for the New Hampshire Effect, we find that sequential contests generate significantly higher (not lower) expenditure than simultaneous contests. This is mainly because in sequential contests, there is significant over-expenditure in all battles. We suggest sunk cost fallacy and utility of winning as two complementary explanations for this behavior and provide supporting evidence.


Election Sequential contests Simultaneous contests Experiments 

JEL Classification

C72 C73 C91 D72 



We thank David Cooper, the Editor of this journal, and two anonymous referees for their valuable suggestions. We have benefitted from the helpful comments of Tim Cason, Sera Linardi, Vai-Lam Mui, Andrew Healy, James Konow, Rebecca Morton, Tim Shields, Stergios Skaperdas, Jonathan Wight, seminar participants at Loyola Marymount University, University of California Irvine, University of Richmond and participants at the International Economic Science Association Conference in Copenhagen, the Virginia Association for Economists Meeting, and the Pittsburgh Behavioral Models of Politics Conference for helpful comments. University of Richmond provided funds for conducting the experiments. The usual disclaimers apply.

Supplementary material

10683_2018_9569_MOESM1_ESM.docx (137 kb)
Supplementary material 1 (DOCX 136 kb)


  1. Altmann, S., Falk, A., & Wibral, M. (2012). Promotions and incentives: The case of multistage elimination tournaments. Journal of Labor Economics, 30, 149–174.CrossRefGoogle Scholar
  2. Amaldoss, W., & Rapoport, A. (2009). Excessive expenditure in two-stage contests: Theory and experimental evidence. In F. Columbus (Ed.), Game theory: Strategies, equilibria, and theorems. Hauppauge, NY: Nova Science Publishers.Google Scholar
  3. Amegashie, J. A., Cadsby, C. B., & Song, Y. (2007). Competitive burnout: Theory and experimental evidence. Games and Economic Behavior, 59, 213–239.CrossRefGoogle Scholar
  4. Arad, A. (2012). The Tennis Coach problem: A game-theoretic and experimental study. The B.E. Journal of Theoretical Economics, 12, 10.CrossRefGoogle Scholar
  5. Arad, A., & Rubinstein, A. (2012). Multi-dimensional iterative reasoning in action: The case of the Colonel Blotto game. Journal of Economic Behavior & Organization, 84, 571–585.CrossRefGoogle Scholar
  6. Augenblick, N. (2016). The sunk-cost fallacy in penny auctions. Review of Economic Studies, 83, 58–86.CrossRefGoogle Scholar
  7. Avrahami, J., & Kareev, Y. (2009). Do the weak stand a chance? Distribution of resources in a competitive environment. Cognitive Science, 33, 940–950.CrossRefGoogle Scholar
  8. Avrahami, J., Kareev, Y., Todd, P.M., & Silverman, B. (2014). Allocation of resources in asymmetric competitions: How do the weak maintain a chance of winning? Journal of Economic Psychology, 42, 161–174.CrossRefGoogle Scholar
  9. Baik, K., & Lee, S. (2000). Two-stage rent-seeking contests with carryovers. Public Choice, 103, 285–296.CrossRefGoogle Scholar
  10. Baliga, S., & Ely, J. C. (2011). Mnemonomics: The sunk cost fallacy as a memory kludge. American Economic Journal: Microeconomics, 3, 35–67.Google Scholar
  11. Battaglini, M., Morton, R. B., & Palfrey, T. R. (2007). Efficiency, equity and timing of voting mechanisms. American Political Science Review, 101, 409–424.CrossRefGoogle Scholar
  12. Borel, E. (1921). La theorie du jeu les equations integrales a noyau symetrique. Comptes Rendus del Academie. 173, 1304–1308; English translation by Savage, L. (1953). The theory of play and integral equations with skew symmetric kernels. Econometrica, 21, 97–100.CrossRefGoogle Scholar
  13. Busch, A., & Mayer, W. (2004). The front-loading problem. In W. Mayer (Ed.), The making of the presidential candidate (pp. 83–132). USA: Rowman and Littlefied Publishers Inc.Google Scholar
  14. Callander, S. (2007). Bandwagons and momentum in sequential voting. Review of Economic Studies, 74, 653–684.CrossRefGoogle Scholar
  15. Cameron, A. C., Gelbach, J. B., & Miller, D. L. (2008). Bootstrap-based improvements for inference with clustered errors. Review of Economics and Statistics, 90, 414–427.CrossRefGoogle Scholar
  16. Cason, T. N., Masters, W. A. & Sheremeta, R. M. (2018). Winner-take-all and proportional-prize contests: Theory and experimental results. Journal of Economic Behavior and Organization. (forthcoming).Google Scholar
  17. Cason, T. N., Sheremeta, R. M., & Zhang, J. (2012). Communication and efficiency in competitive coordination games. Games and Economic Behavior, 76, 26–43.CrossRefGoogle Scholar
  18. Cason, T. N., Sheremeta, R. M., & Zhang, J. (2017). Asymmetric and endogenous within-group communication in competitive coordination games. Experimental Economics, 20, 946–972.CrossRefGoogle Scholar
  19. Chowdhury, S. M., Kovenock, D., & Sheremeta, R. M. (2013). An experimental investigation of Colonel Blotto games. Economic Theory, 52, 833–861.CrossRefGoogle Scholar
  20. Chowdhury, S. M., Sheremeta, R. M., & Turocy, T. L. (2014). Overbidding and overspreading in rent-seeking experiments: Cost structure and prize allocation rules. Games and Economic Behavior, 87, 224–238.CrossRefGoogle Scholar
  21. Clark, D. J., & Konrad, K. A. (2007). Asymmetric conflict weakest link against best shot. Journal of Conflict Resolution, 51, 457–469.CrossRefGoogle Scholar
  22. Clark, D. J., & Konrad, K. A. (2008). Fragmented property rights and incentives for R&D. Management Science, 54, 969–981.CrossRefGoogle Scholar
  23. Cox, J. C., Smith, V. L., & Walker, J. M. (1988). Theory and individual behavior of first-price auctions. Journal of Risk and Uncertainty, 1, 61–99.CrossRefGoogle Scholar
  24. Davis, D., & Reilly, R. (1998). Do too many cooks spoil the stew? An experimental analysis of rent-seeking and the role of a strategic buyer. Public Choice, 95, 89–115.CrossRefGoogle Scholar
  25. Dechenaux, E., Kovenock, D., & Sheremeta, R. M. (2015). A survey of experimental research on contests, all-pay auctions and tournaments. Experimental Economics, 18, 609–669.CrossRefGoogle Scholar
  26. Deck, C., & Sheremeta, R. M. (2012). Fight or flight? Defending against sequential attacks in the Game of Siege. Journal of Conflict Resolution, 56, 1069–1088.CrossRefGoogle Scholar
  27. Deck, C. & Sheremeta, R. M. (2016). Tug-of-war in the laboratory. Working paper.Google Scholar
  28. Duffy, J., & Matros, A. (2015). Stochastic asymmetric Blotto games: Some new results. Economics Letters, 134, 4–8.CrossRefGoogle Scholar
  29. Feigenbaum, J. J., & Shelton, C. A. (2013). The vicious cycle: Fundraising and perceived viability in US presidential primaries. Quarterly Journal of Political Science, 8, 1–40.Google Scholar
  30. Fischbacher, U. (2007). z-Tree: Zurich toolbox for ready-made economic experiments. Experimental Economics, 10, 171–178.CrossRefGoogle Scholar
  31. Friedman, L. (1958). Game-theory models in the allocation of advertising expenditure. Operations Research, 6, 699–709.CrossRefGoogle Scholar
  32. Friedman, D., Pommerenke, K., Lukose, R., Milam, G., & Huberman, B. (2007). Searching for the sunk cost fallacy. Experimental Economics, 10, 79–104.CrossRefGoogle Scholar
  33. Fudenberg, D., Gilbert, R., Stiglitz, J., & Tirole, J. (1983). Preemption, leapfrogging and competition in patent races. European Economic Review, 22, 3–31.CrossRefGoogle Scholar
  34. Gelder, A., & Kovenock, D. (2017). Dynamic behavior and player types in majoritarian multi-battle contests. Games and Economic Behavior, 104, 444–455.CrossRefGoogle Scholar
  35. Goeree, J. K., Holt, C. A., & Palfrey, T. R. (2002). Quantal response equilibrium and overbidding in private-value auctions. Journal of Economic Theory, 104, 247–272.CrossRefGoogle Scholar
  36. Harris, C., & Vickers, J. (1985). Perfect equilibrium in a model of a race. Review of Economic Studies, 52, 193–209.CrossRefGoogle Scholar
  37. Harris, C., & Vickers, J. (1987). Racing with uncertainty. Review of Economic Studies, 54, 1–21.CrossRefGoogle Scholar
  38. Hausken, K. (2008). Strategic defense and attack for series and parallel reliability systems. European Journal of Operational Research, 186, 856–881.CrossRefGoogle Scholar
  39. Höchtl, W., Kerschbamer, R., Stracke, R., & Sunde, U. (2015). Incentives vs. selection in promotion tournaments: Can a designer kill two birds with one stone? Managerial and Decision Economics, 36, 275–285.CrossRefGoogle Scholar
  40. Holt, C. A., Kydd, A., Razzolini, L., & Sheremeta, R. (2016). The paradox of misaligned profiling theory and experimental evidence. Journal of Conflict Resolution, 60, 482–500.CrossRefGoogle Scholar
  41. Holt, C. A., & Laury, S. K. (2002). Risk aversion and incentive effects. American Economic Review, 92, 1644–1655.CrossRefGoogle Scholar
  42. Hortala-Vallve, R., & Llorente-Saguer, A. (2010). A simple mechanism for resolving conflict. Games and Economic Behavior, 70, 375–391.CrossRefGoogle Scholar
  43. Just, D. R., & Wansink, B. (2011). The flat-rate pricing paradox: Conflicting effects of “all-you-can-eat” buffet pricing. Review of Economics and Statistics, 93, 193–200.CrossRefGoogle Scholar
  44. Klumpp, T., & Polborn, M. K. (2006). Primaries and the New Hampshire effect. Journal of Public Economics, 90, 1073–1114.CrossRefGoogle Scholar
  45. Konrad, K. A., & Kovenock, D. (2009). Multi-battle contests. Games Economic Behavior, 66, 256–274.CrossRefGoogle Scholar
  46. Kovenock, D., & Roberson, B. (2012). Conflicts with multiple battlefields. In M. R. Garfinkel & S. Skaperdas (Eds.), Oxford handbook of the economics of peace and conflict (pp. 503–531). New York: Oxford University Press.Google Scholar
  47. Kovenock, D., Roberson, B. & Sheremeta, R. M. (2010). The attack and defense of weakest-link networks. Working paper.Google Scholar
  48. Kvasov, D. (2007). Contests with limited resources. Journal of Economic Theory, 136, 738–748.CrossRefGoogle Scholar
  49. Leininger, W. (1991). Patent competition, rent dissipation, and the persistence of monopoly: The role of research budgets. Journal of Economic Theory, 53, 146–172.CrossRefGoogle Scholar
  50. Mago, S. D., Savikhin, A. C., & Sheremeta, R. M. (2016). Facing your opponents: Social identification and information feedback in contests. Journal of Conflict Resolution, 60, 459–481.CrossRefGoogle Scholar
  51. Mago, S. D., & Sheremeta, R. M. (2017). Multi-battle contests: An experimental study. Southern Economic Journal, 84, 407–425.CrossRefGoogle Scholar
  52. Mago, S. D., Sheremeta, R. M., & Yates, A. (2013). Best-of-three contest experiments: Strategic versus psychological momentum. International Journal of Industrial Organization, 31, 287–296.CrossRefGoogle Scholar
  53. Mayer, W. (2004). The basic dynamics of contemporary nomination process. In W. Mayer (Ed.), The making of the presidential candidate (pp. 83–132). Lanham, MA: Rowman and Littlefied Publishers Inc.Google Scholar
  54. McKee, M. (1989). Intra-experimental income effects and risk aversion. Economic Letters, 30, 109–115.CrossRefGoogle Scholar
  55. Montero, M., Possajennikov, A., Sefton, M., & Turocy, T. L. (2016). Majoritarian Blotto contests with asymmetric battlefields: An experiment on Apex games. Economic Theory, 61, 55–89.CrossRefGoogle Scholar
  56. Morton, R. B., & Williams, K. C. (1999). Information asymmetries and simultaneous versus sequential voting. American Political Science Review, 93, 51–67.CrossRefGoogle Scholar
  57. Morton, R. B., & Williams, K. C. (2000). Learning by voting: Sequential choices in presidential primaries and other elections. Ann Arbor, MI: University of Michigan Press.Google Scholar
  58. Parco, J., Rapoport, A., & Amaldoss, W. (2005). Two-stage contests with budget constraints: An experimental study. Journal of Mathematical Psychology, 49, 320–338.CrossRefGoogle Scholar
  59. Price, C. R., & Sheremeta, R. M. (2011). Endowment effects in contests. Economics Letters, 111, 217–219.CrossRefGoogle Scholar
  60. Price, C. R., & Sheremeta, R. M. (2015). Endowment origin, demographic effects and individual preferences in contests. Journal of Economics and Management Strategy, 24, 597–619.CrossRefGoogle Scholar
  61. Roberson, B. (2006). The Colonel Blotto game. Economic Theory, 29, 1–24.CrossRefGoogle Scholar
  62. Ryvkin, D. (2011). Fatigue in dynamic tournaments. Journal of Economics and Management Strategy, 20, 1011–1041.CrossRefGoogle Scholar
  63. Schmitt, P., Shupp, R., Swope, K., & Cadigan, J. (2004). Multi-period rent-seeking contests with carryover: Theory and experimental evidence. Economics of Governance, 10, 247–259.CrossRefGoogle Scholar
  64. Sheremeta, R. M. (2010a). Expenditures and information disclosure in two-stage political contests. Journal of Conflict Resolution, 54, 771–798.CrossRefGoogle Scholar
  65. Sheremeta, R. M. (2010b). Experimental comparison of multi-stage and one-stage contests. Games and Economic Behavior, 68, 731–747.CrossRefGoogle Scholar
  66. Sheremeta, R. M. (2011). Contest design: An experimental investigation. Economic Inquiry, 49, 573–590.CrossRefGoogle Scholar
  67. Sheremeta, R. M. (2013). Overbidding and heterogeneous behavior in contest experiments. Journal of Economic Surveys, 27, 491–514.CrossRefGoogle Scholar
  68. Sheremeta, R. M. (2015). Behavioral dimensions of contests. In R. D. Congleton & A. L. Hillman (Eds.), Companion to the political economy of rent seeking (pp. 150–164). London: Edward Elgar.Google Scholar
  69. Sheremeta, R. M. (2016). Impulsive behavior in competition: Testing theories of overbidding in rent-seeking contests. Working paper.Google Scholar
  70. Sheremeta, R. M. (2017). Experimental research on contests. Working paper.Google Scholar
  71. Sheremeta, R. M., & Zhang, J. (2010). Can groups solve the problem of over-bidding in contests? Social Choice and Welfare, 35, 175–197.CrossRefGoogle Scholar
  72. Shupp, R., Sheremeta, R. M., Schmidt, D., & Walker, J. (2013). Resource allocation contests: Experimental evidence. Journal of Economic Psychology, 39, 257–267.CrossRefGoogle Scholar
  73. Snyder, J. (1989). Election goals and the allocation of campaign resources. Econometrica, 57, 630–660.CrossRefGoogle Scholar
  74. Staw, B. M. (1976). Knee-deep in the big muddy: A study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16, 27–44.CrossRefGoogle Scholar
  75. Szentes, B., & Rosenthal, R. W. (2003). Beyond chopsticks: Symmetric equilibria in majority auction games. Games and Economic Behavior, 45, 278–295.CrossRefGoogle Scholar
  76. Tullock, G. (1980). Efficient rent seeking. In J. M. Buchanan, R. D. Tollison, & G. Tullock (Eds.), Toward a theory of the rent-seeking society (pp. 97–112). College Station, TX: Texas A&M University Press.Google Scholar
  77. Zizzo, D. J. (2002). Racing with uncertainty: A patent race experiment. International Journal of Industrial Organization, 20, 877–902.CrossRefGoogle Scholar

Copyright information

© Economic Science Association 2018

Authors and Affiliations

  1. 1.Department of Economics, Robins School of BusinessUniversity of RichmondRichmondUSA
  2. 2.Weatherhead School of ManagementCase Western Reserve UniversityClevelandUSA
  3. 3.Economic Science InstituteChapman UniversityOrangeUSA

Personalised recommendations