Risk Taking in Winner-Take-All Competition

Arbeitspapier

We analyze a two-stage game between two heterogeneous players. At stage one, common risk is chosen by one of the players. At stage two, both players observe the given level of risk and simultaneously invest in a winner-take-all competition. The game is solved theoretically and then tested by using laboratory experiments. We find three effects that determine risk taking at stage one - an effort effect, a likelihood effect and a reversed likelihood effect. For the likelihood effect, risk taking and investments are clearly in line with theory. Pairwise comparison shows that the effort effect seems to be more relevant than the reversed likelihood effect when taking risk.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: SFB/TR 15 Discussion Paper ; No. 233

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Personnel Economics: Firm Employment Decisions; Promotions ; Design of Experiments: Laboratory, Individual ; Organizational Behavior; Transaction Costs; Property Rights
• Thema: Tournaments ; Competition ; Risk-Taking ; Experiment

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kräkel, Matthias ; Nieken, Petra ; Przemeck, Judith
• Ereignis: Veröffentlichung
• (wer): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (wo): München
• (wann): 2008

Weitere Informationen

• DOI: doi:10.5282/ubm/epub.13319
• Handle: http://hdl.handle.net/10419/94021
• URN: urn:nbn:de:bvb:19-epub-13319-5
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ