Risk aversion and prudence in contests

Faculty/Professorship: Economic Theory  
Author(s): Sahm, Marco  
Title of the Journal: Economics Bulletin
ISSN: 1545-2921
Publisher Information: Champaign-Urbana, Ill. : Univ. of Illinois
Year of publication: 2017
Volume: 37
Issue: 2
Pages: 1122-1132
Language(s): English
URL: http://www.accessecon.com/Pubs/EB/2017/Volume37...
I examine the impact of risk preferences on efforts and winning probabilities in generalized Tullock contests between two players. The theoretical analysis yields two ma in results. First, in symmetric contests, a higher common level of the agents ́ risk aversion will lead to lower aggregate effort if it comes along with an increase in downside risk aversion. Second, in many asymmetric contests, higher risk-aversion will be a disadvantage if the agent is also more downside risk-averse
Peer Reviewed: Ja
International Distribution: Ja
Open Access Journal: Ja
Type: Article
URI: https://fis.uni-bamberg.de/handle/uniba/44021
Year of publication: 28. June 2018