Abstract

http://ssrn.com/abstract=428022
 
 

References (19)



 
 

Citations (4)



 


 



Resource Allocation Contests: Experimental Evidence


David Schmidt


Federal Trade Commission - Antitrust II

Robert Shupp


Michigan State University - Department of Agricultural, Food and Resource Economics

James M. Walker


Indiana University - Department of Economics and Workshop in Political Theory and Policy Analysis

August 29, 2006

CAEPR Working Paper No. 2006-004
FTC Bureau of Economics Working Paper No. 261

Abstract:     
Across many forms of rent seeking contests, the impact of risk aversion on equilibrium play is indeterminate. We design an experiment to compare individuals' decisions across three contests which are isomorphic under risk-neutrality, but are typically not isomorphic under other risk preferences. The pattern of individual play across our contests is not consistent with a Bayes-Nash equilibrium for any distribution of risk preferences. We show that replacing the Bayes-Nash equilibrium concept with the quantal response equilibrium, along with heterogeneous risk preferences can produce equilibrium patterns of play that are very similar to the patterns we observe.

Number of Pages in PDF File: 35

Keywords: rent seeking, experiments, risk aversion, game theory

JEL Classification: C72, C92, D72

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Date posted: January 7, 2004  

Suggested Citation

Schmidt, David and Shupp, Robert and Walker, James M., Resource Allocation Contests: Experimental Evidence (August 29, 2006). CAEPR Working Paper No. 2006-004; FTC Bureau of Economics Working Paper No. 261. Available at SSRN: http://ssrn.com/abstract=428022 or http://dx.doi.org/10.2139/ssrn.428022

Contact Information

David Schmidt (Contact Author)
Federal Trade Commission - Antitrust II ( email )
600 Pennsylvania Avenue, NW
Rm 4233
Washington, DC 20580
United States
202-326-2781 (Phone)
202-326-3443 (Fax)
Robert Shupp
Michigan State University - Department of Agricultural, Food and Resource Economics ( email )
Agricultural Hall
East Lansing, MI 48824
United States
765-285-3724 (Phone)
765-285-8024 (Fax)
James M. Walker
Indiana University - Department of Economics and Workshop in Political Theory and Policy Analysis ( email )
Wylie Hall 105
Bloomington, IN 47405
United States
812-855-2760 (Phone)
812-855-3736 (Fax)

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