Next Article in Journal
Does Implicit Bias Predict Dictator Giving?
Previous Article in Journal
Unequal Incentives and Perceived Fairness in Groups
Previous Article in Special Issue
Instrumental Reciprocity as an Error
Article Menu

Export Article

Open AccessArticle
Games 2018, 9(3), 72; https://doi.org/10.3390/g9030072

The Effect of Competition on Risk Taking in Contests

1
Department of Economics and Statistics, University of Siena, 53100 Siena, Italy
2
Department of Economics and CentER, Tilburg University, 5000 LE Tilburg, The Netherlands
*
Authors to whom correspondence should be addressed.
Received: 15 July 2018 / Revised: 14 September 2018 / Accepted: 17 September 2018 / Published: 19 September 2018
(This article belongs to the Special Issue Economic Behavior and Game Theory)
Full-Text   |   PDF [3115 KB, uploaded 21 September 2018]   |  

Abstract

We investigate, theoretically and experimentally, the effect of competition on risk taking in a contest in which players only decide on the level of risk they wish to take. Taking more risk implies a chance of a higher performance, but also implies a higher chance of failure. We vary the level of competition in two ways: by varying the number of players (2 players versus 8 players), and by varying the sensitivity of the contest to differences in performance (lottery contest versus all-pay auction). Our results show that there is a significant interaction effect between the two treatments, suggesting that players are particularly prone to take more risks if both the number of players and the sensitivity to performance are higher. View Full-Text
Keywords: risk taking; competition; contests; experiments risk taking; competition; contests; experiments
Figures

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
SciFeed

Share & Cite This Article

MDPI and ACS Style

Spadoni, L.; Potters, J. The Effect of Competition on Risk Taking in Contests. Games 2018, 9, 72.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Games EISSN 2073-4336 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top