Loss Aversion and Rent-Seeking: An Experimental Study

We report an experiment designed to evaluate the impact of loss aversion on rent-seeking contests. We find, as theoretically predicted, a negative relationship between rent-seeking expenditures and loss aversion. However, for any degree of loss aversion, levels of rent-seeking expenditure are higher than predicted. Moreover, we find that the effect of loss aversion becomes weaker with repetition of the contest.

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Year of publication:	2008-10
Authors:	Kong, Xiaojing
Institutions:	Centre for Decision Research and Experimental Economics (CeDEx), School of Economics

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Extent:	application/pdf
Series:	Discussion Papers. - ISSN 1749-3293.
Type of publication:	Book / Working Paper
Notes:	Number 2008-13
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005453698