Endowment Effects in Contests

Sheremeta, Roman M.; Price, Curtis R.

doi:10.2139/ssrn.1755603

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Endowment Effects in Contests

10 Pages Posted: 8 Feb 2011

See all articles by Roman M. Sheremeta

Curtis R. Price

University of Southern Indiana - School of Business

Date Written: January 31, 2011

Abstract

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

Sheremeta, Roman M. and Price, Curtis R., Endowment Effects in Contests (January 31, 2011). Available at SSRN: https://ssrn.com/abstract=1755603 or http://dx.doi.org/10.2139/ssrn.1755603