Best-of-two contests with psychological effects
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We study a best-of-two contest with two homogeneous players (teams). The winner is the player who wins in both stages. In the case of one victory for each team, a draw determines the identity of the winner. Each team has a value of winning the contest as well as a value of winning a single game. A team’s value of winning a game at its home field is higher than its value of winning a game away from home. We show that if winning in the first stage provides a psychological advantage in the second stage, each team would prefer to play the second stage at its home field.
KeywordsWinner-take-all contests All-pay contests Best-of-two contests
JEL ClassificationsD44 O31 O32
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