Risk Taking in Selection Contests

31 Pages Posted: 15 Nov 1999

See all articles by Hans K. Hvide

Hans K. Hvide

University of Bergen - Department of Economics; University of Aberdeen - Business School; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Eirik Gaard Kristiansen

NHH Norwegian School of Economics; Norwegian School of Economics (NHH) - Department of Economics

Date Written: November 27, 2000

Abstract

We study a tournament/contest where the strategic variable is degree of risk rather than amount of effort. The degree to which the most able contestants win (selection efficiency) is examined. We show that the selection efficiency of a contest may be improved by limiting the competition in two ways; a) by having a small number of contestants, and b) by restricting contestant quality. The results may contribute to our understanding of such diverse phenomena as promotion processes in large firms, selection of fund managers and research tournaments.

JEL Classification: C44, D29, D83, J41

Suggested Citation

Hvide, Hans and Kristiansen, Eirik Gaard, Risk Taking in Selection Contests (November 27, 2000). Available at SSRN: https://ssrn.com/abstract=189989 or http://dx.doi.org/10.2139/ssrn.189989

Hans Hvide (Contact Author)

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

HOME PAGE: http://hans.hvide.googlepages.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Eirik Gaard Kristiansen

NHH Norwegian School of Economics ( email )

Helleveien 30
Bergen, NO-5045
Norway
+47 55 95 92 78 (Phone)
+47 55 95 95 43 (Fax)

Norwegian School of Economics (NHH) - Department of Economics

Helleveien 30
N-5035 Bergen
Norway

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