Risk Aversion and Prudence in Contests von Marco Sahm | ISBN 9783943153392

Risk Aversion and Prudence in Contests

von Marco Sahm
Buchcover Risk Aversion and Prudence in Contests | Marco Sahm | EAN 9783943153392 | ISBN 3-943153-39-8 | ISBN 978-3-943153-39-2

Risk Aversion and Prudence in Contests

von Marco Sahm
I examine the impact of risk preferences on efforts and winning probabilities in generalised Tullock contests between two players. The theoretical analysis yields two main results. First, I specify a sufficient condition on the agents’ comparative prudence under which a higher common level of risk aversion leads to lower aggregate effort in symmetric contests. Sec- ond, I show that for a certain range of parameters in asymmetric contests, higher risk-aversion will be a disadvantage if the agent is comparativelyprudent.