Esma Ozer from Penn State will present "Strategic Interactions and Peer Learning in Contests"

Abstract: Many educational systems rely on rank-based rewards to allocate college seats or grades. While rewarding relative performance can boost effort, it may also discourage cooperation, as students strategically limit knowledge sharing to protect their standing, potentially reducing total learning. This paper studies how competition shapes individual effort, peer interactions, and skill production, using a structural model and a tightly linked lab-in-the-field experiment. The model, in which heterogeneous agents make effort choices, formalizes how competition shapes interactions. The experiment varies competition intensity and peer matching exogenously to generate rich behavioral data for structural estimation, collected through a custom-designed learning platform. Results show that moderate competition increases both individual and peer learning, while intense competition shifts effort away from cooperation—particularly among students near the prize margin. Under intense competition, students with similar ability levels interact less than they normally would, which crowds out peer learning. LLM-based interaction analysis confirms that cooperative language declines as competition intensifies. Structural model estimation quantifies production and preference components. Peer learning entails lower disutility compared to individual learning. Barriers to participation are particularly high for lower-ability students, while peer learning helps reduce them. The counterfactual analyses examine classroom composition, contest design, and policies that target cost of learning, which determine participation at the extensive margin.