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Endowment effects in contests

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  • Price, Curtis R.
  • Sheremeta, Roman M.

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 R. & Sheremeta, Roman M., 2011. "Endowment effects in contests," Economics Letters, Elsevier, vol. 111(3), pages 217-219, June.
    • Handle: RePEc:eee:ecolet:v:111:y:2011:i:3:p:217-219
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    More about this item

    Keywords

    Rent-seeking Contest Experiments Overbidding Endowment;

    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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