Risk-taking tournaments - Theory and experimental evidence

Petra Nieken and Dirk Sliwka

Journal of Economic Psychology, 2010, vol. 31, issue 3, 254-268

Abstract: We study risk-taking behavior in a simple two person tournament in a theoretical model as well as a laboratory experiment. First, a model is analyzed in which two agents simultaneously decide between a risky and a safe strategy and we allow for all possible degrees of correlation between the outcomes of the risky strategies. We show that risk-taking behavior crucially depends on this correlation as well as on the size of a potential lead of one of the contestants. We find that the experimental subjects acted mostly quite well in line with the derived theoretical predictions.

Keywords: Tournaments; Competition; Risk-taking; Experiment (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (39)

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Working Paper: Risk-Taking Tournaments: Theory and Experimental Evidence (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:31:y:2010:i:3:p:254-268

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