The contest winner: Gifted or venturesome?

Arbeitspapier

This paper examines the chance of winning a Tullock-contest when participants differ in both their talent and their attitude towards risk. For the case of CARA preferences, it is shown that the winning probability may be higher for a low-skilled agent with a low degree of risk aversion than for a high-skilled agent with a high degree of risk-aversion. Such an outcome often is undesirable. It will occur if and only if the agents' ratio of degrees of risk aversion is larger than their ratio of skill levels and the rent of the contest is sufficiently high.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3285

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• Subject: selection contest ; asymmetric players ; risk aversion ; Nichtkooperatives Spiel ; Risikoaversion ; Public Choice ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sahm, Marco
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/46283
• Last update: 10.03.2025, 11:43 AM CET