Risk aversion and prudence in contests

Arbeitspapier

I examine the impact of risk preferences on efforts and winning probabilities in generalised Tullock contests between two players. The theoretical analysis yields two main results. First, I specify a sufficient condition on the agents' comparative prudence under which a higher common level of risk aversion leads to lower aggregate effort in symmetric contests. Second, I show that for a certain range of parameters in asymmetric contests, higher risk-aversion will be a disadvantage if the agent is comparatively prudent.

Object Details

• ISBN: 978-3-943153-39-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: BERG Working Paper Series ; No. 120

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• Subject: Tullock Contest ; Risk Aversion ; Prudence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sahm, Marco
• Event: Veröffentlichung
• (who): Bamberg University, Bamberg Economic Research Group (BERG)
• (where): Bamberg
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/157287
• Last update: 10.03.2025, 11:44 AM CET