Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/167673 
Year of Publication: 
2017
Series/Report no.: 
BERG Working Paper Series No. 127
Publisher: 
Bamberg University, Bamberg Economic Research Group (BERG), Bamberg
Abstract: 
We investigate how individual risk preferences affect the likelihood of selecting the more able contestant within a two-player Tullock contest. Our theoretical model yields two main predictions: First, an increase in the risk aversion of a player worsens her odds unless she already has a sufficiently large advantage. Second, if the prize money is sufficiently large, a less able but less risk averse contestant can achieve an equal or even higher probability of winning than a more able but more risk averse opponent. In a laboratory experiment we confirm both, the non-monotonic impact and the compensating effect of risk aversion on winning probabilities. Our results suggest a novel explanation for the gender gap and the optimality of limited monetary incentives in selection contests.
Subjects: 
Selection Contest
Risk Aversion
Competitive Balance
Gender Gap
JEL: 
C72
D72
J31
K41
M51
M52
ISBN: 
978-3-943153-47-7
Document Type: 
Working Paper

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