Risk Aversion, Heterogeneity and Contests
AbstractWe introduce a novel method of modelling contests that avoids the complexities encountered by the "best response function" approach. We analyse contests in which (i) there are many risk averse players, (ii) attitudes to risk may differ across individuals, and (iii) the technology that transforms rent-seeking effort into probability of winning may also differ across individuals. We establish that, if every player has a constant degree of absolute risk aversion, a unique equilibrium exists. We also establish comparative static results and examine how the level of rent dissipation is affected by the heterogeneity of attitudes towards risk and the precise nature of the technology. Copyright 2003 by Kluwer Academic Publishers
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 117 (2003)
Issue (Month): 1-2 (October)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100332
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.