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Risk-Taking Tournaments: Theory and Experimental Evidence

Author(s) / Creator(s)

Nieken, Petra
Sliwka, Dirk

Abstract / Description

We study risk-taking behavior in a simple two person tournament in a theoretical model as well as a laboratory experiment. First, a model is analyzed in which two agents simultaneously decide between a risky and a safe strategy and we allow for all possible degrees of correlation between the outcomes of the risky strategies. We show that risk-taking behavior crucially depends on this correlation as well as on the size of a potential lead of one of the contestants. We find that the experimental subjects acted mostly quite well in line with the derived theoretical predictions.

Keyword(s)

Wettkampf Risiko Experiment Konkurrenz Risikobereitschaft tournaments competition risk-taking experiment

Persistent Identifier

Date of first publication

2008

Is part of series

Forschungsinstitut zur Zukunft der Arbeit/ Institute for the Study of Labor: IZA Discussion Paper Series;3400

Citation

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  • Author(s) / Creator(s)
    Nieken, Petra
  • Author(s) / Creator(s)
    Sliwka, Dirk
  • PsychArchives acquisition timestamp
    2022-11-17T11:03:19Z
  • Made available on
    2008-06-02
  • Made available on
    2015-12-01T10:32:07Z
  • Made available on
    2022-11-17T11:03:19Z
  • Date of first publication
    2008
  • Abstract / Description
    We study risk-taking behavior in a simple two person tournament in a theoretical model as well as a laboratory experiment. First, a model is analyzed in which two agents simultaneously decide between a risky and a safe strategy and we allow for all possible degrees of correlation between the outcomes of the risky strategies. We show that risk-taking behavior crucially depends on this correlation as well as on the size of a potential lead of one of the contestants. We find that the experimental subjects acted mostly quite well in line with the derived theoretical predictions.
    en
  • Persistent Identifier
    https://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:bsz:291-psydok-16042
  • Persistent Identifier
    https://hdl.handle.net/20.500.11780/1067
  • Persistent Identifier
    https://doi.org/10.23668/psycharchives.8989
  • Language of content
    eng
  • Is part of
    IZA Discussion Paper Series No. 3400
  • Is part of series
    Forschungsinstitut zur Zukunft der Arbeit/ Institute for the Study of Labor: IZA Discussion Paper Series;3400
  • Keyword(s)
    Wettkampf
    de
  • Keyword(s)
    Risiko
    de
  • Keyword(s)
    Experiment
    de
  • Keyword(s)
    Konkurrenz
    de
  • Keyword(s)
    Risikobereitschaft
    de
  • Keyword(s)
    tournaments
    en
  • Keyword(s)
    competition
    en
  • Keyword(s)
    risk-taking
    en
  • Keyword(s)
    experiment
    en
  • Dewey Decimal Classification number(s)
    150
  • Title
    Risk-Taking Tournaments: Theory and Experimental Evidence
    en
  • DRO type
    report
  • Visible tag(s)
    PsyDok