Endowment Effects in Contests
AbstractWe design an experiment to test if the manner in which subjects receive the endowment has any bearing on the amount of overbidding in contests. We find that overbidding is significantly higher when subjects are given a large per-experiment endowment rather than when the endowment is given per-period. Risk-aversion and non-monetary utility of winning play important roles in explaining our findings.
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Bibliographic InfoPaper provided by Chapman University, Economic Science Institute in its series Working Papers with number 09-07.
Length: 14 pages
Date of creation: Jul 2009
Date of revision:
rent-seeking; contest; experiments; overbidding; endowment;
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-11 (All new papers)
- NEP-EXP-2010-06-11 (Experimental Economics)
- NEP-UPT-2010-06-11 (Utility Models & Prospect Theory)
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