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Title:Risk-taking tournaments: theory and experimental evidence PDF Logo
Authors:Nieken, Petra
Sliwka, Dirk
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3400
Abstract:We study risk-taking behavior in a simple two person tournament in a theoretical model as well as a laboratory experiment. First, a model is analyzed in which two agents simultaneously decide between a risky and a safe strategy and we allow for all possible degrees of correlation between the outcomes of the risky strategies. We show that risk-taking behavior crucially depends on this correlation as well as on the size of a potential lead of one of the contestants. We find that the experimental subjects acted mostly quite well in line with the derived theoretical predictions.
Subjects:Tournaments
competition
risk-taking
experiment
JEL:M51
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008031840
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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