Loss Aversion and the Tullock Paradox
University of Nottingham Economics Discussion Paper No. 03/17
Posted: 30 Jun 2004
Date Written: September 2003
Abstract
We show that the presence of loss aversion on the part of participants in a Tullock imperfectly discriminating contest will significantly reduce the proportion of the rent dissipated in the form of resources used up in the competition for that rent. We also suggest a simple experiment that can reveal whether contestants are, indeed, loss averse.
JEL Classification: C72, D72, D80
Suggested Citation: Suggested Citation
Cornes, Richard C., Loss Aversion and the Tullock Paradox (September 2003). University of Nottingham Economics Discussion Paper No. 03/17, Available at SSRN: https://ssrn.com/abstract=467901
Richard C. Cornes (Contact Author)
Australian National University (ANU) - Faculty of Economics & Commerce ( email )
Canberra, Australian Capital Territory 2601
Australia
CESifo (Center for Economic Studies and Ifo Institute) ( email )
Poschinger Str. 5
Munich, DE-81679
Germany
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