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Tullock contest with reference‐dependent preferences

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  • Francesco Fallucchi
  • Francesco Trevisan

Abstract

We study the Tullock contest model with loss aversion and endogenously formed reference points. In a contest with n possibly heterogeneous players and convex effort costs, we establish sufficient conditions for a unique Nash equilibrium in pure strategies. Subsequently, we analyze the impact of loss aversion on players' spending behavior, probability of winning, and rent dissipation.

Suggested Citation

  • Francesco Fallucchi & Francesco Trevisan, 2024. "Tullock contest with reference‐dependent preferences," Economic Inquiry, Western Economic Association International, vol. 62(4), pages 1618-1628, October.
    • Handle: RePEc:bla:ecinqu:v:62:y:2024:i:4:p:1618-1628
    DOI: 10.1111/ecin.13251
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    References listed on IDEAS

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