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Endowment Effects in Contests

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  • Price, Curtis
  • Sheremeta, Roman

Abstract

We experimentally study overbidding in contests and 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 can partially explain our findings.

Suggested Citation

  • Price, Curtis & Sheremeta, Roman, 2011. "Endowment Effects in Contests," MPRA Paper 52103, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52103
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    References listed on IDEAS

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    1. Sheremeta, Roman M., 2010. "Experimental comparison of multi-stage and one-stage contests," Games and Economic Behavior, Elsevier, vol. 68(2), pages 731-747, March.
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    More about this item

    Keywords

    rent-seeking; contest; experiments; overbidding; endowment;
    All these keywords.

    JEL classification:

    • 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

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