Endowment Effects in Contests
10 Pages Posted: 8 Feb 2011
Date Written: January 31, 2011
We experimentally study overbidding in contests and find that overbidding is significantly higher when subjects are given a large per-experiment endowment rather than when the endowment is given per-period. Risk-aversion and non-monetary utility of winning can partially explain our findings.
Keywords: rent-seeking, contest, experiments, overbidding, endowment
JEL Classification: C72, C91, D72
Suggested Citation: Suggested Citation