Risk aversion and prudence in contests

Marco Sahm ()
Additional contact information
Marco Sahm: University of Bamberg

Economics Bulletin, 2017, vol. 37, issue 2, 1122-1132

Abstract: I examine the impact of risk preferences on efforts and winning probabilities in generalized Tullock contests between two players. The theoretical analysis yields two main 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.

Keywords: Tullock contest; risk aversion; prudence; downside risk aversion (search for similar items in EconPapers)
JEL-codes: C7 D7 (search for similar items in EconPapers)
Date: 2017-05-25
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I2-P99.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-17-00215

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().