Risk aversion in symmetric and asymmetric contests

Richard Cornes and Roger Hartley ()

Economic Theory, 2012, vol. 51, issue 2, 247-275

Abstract: We analyze existence, uniqueness and properties of equilibria in incompletely discriminating Tullock contests with logistic contest success functions, when contestants are risk averse. We prove that a Nash equilibrium for such a contest exists, but give an example of a symmetric contest with both symmetric and asymmetric equilibria, showing that risk aversion may lead to multiple equilibria. Symmetric contests have unique symmetric equilibria but additional conditions are necessary for general uniqueness. We also study the effects on incumbents of additional competitors entering the contest under these conditions and examine the effects of risk aversion on rent dissipation in symmetric and asymmetric contests. Copyright Springer-Verlag 2012

Keywords: Contest theory; Aggregative games; Noncooperative games; Risk aversion; C72; D72 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (61)

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Working Paper: Risk aversion in symmetric and asymmetric contests (2008)
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DOI: 10.1007/s00199-009-0490-9

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