DOI: 10.5176/2251-2012_QQE14.07
Authors: Jean-Daniel Guigou, Bruno Lovat, and Marc Boissaux
Abstract:
We study a rent-seeking proprtional-prize contest between two heterogeneously risk-averse players and given prize amounts are nor-, mally distributed rather than known ex ante. We establish existence, and unicity of a Nash equilibrium linked to this contest, and study, the equilibrium eorts implied. We then obtain a similar equilib-, rium result for a winner-takes-all lottery contest within the same, risky rent context, and compare optimal eorts as well as expected, utilities between the two contest types.
Keywords: contests, risky rents, risk aversion, symmetric and asymmetric Nash equilibrium
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