Loss Aversion and Rent-Seeking: An Experimental Study
AbstractWe report an experiment designed to evaluate the impact of loss aversion on rent-seeking contests. We find, as theoretically predicted, a negative relationship between rent-seeking expenditures and loss aversion. However, for any degree of loss aversion, levels of rent-seeking expenditure are higher than predicted. Moreover, we find that the effect of loss aversion becomes weaker with repetition of the contest.
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Bibliographic InfoPaper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2008-13.
Date of creation: Oct 2008
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- Faravelli, Marco & Stanca, Luca, 2012.
"When less is more: Rationing and rent dissipation in stochastic contests,"
Games and Economic Behavior,
Elsevier, vol. 74(1), pages 170-183.
- Marco Faravelli & Luca Stanca, 2010. "When Less is More: Rationing and Rent Dissipation in Stochastic Contests," Working Papers 197, University of Milano-Bicocca, Department of Economics, revised Sep 2010.
- Marco Faravelli & Luca Stanca, 2010. "When Less is More: Rationing and Rent Dissipation in Stochastic Contests," Discussion Papers Series 412, School of Economics, University of Queensland, Australia.
- Roman M. Sheremeta, 2013.
"Overbidding and Heterogeneous Behavior in Contest Experiments,"
13-06, Chapman University, Economic Science Institute.
- Steven Tucker & Charles Noussair & Roman M. Sheremeta, 2013. "Overbidding And Heterogeneous Behavior In Contest Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 491-514, 07.
- Sheremeta, Roman, 2013. "Overbidding and Heterogeneous Behavior in Contest Experiments," MPRA Paper 44124, University Library of Munich, Germany.
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