We consider a strategic contest game in which risk-averse agents exert efforts to increase their share of a risky rent. We show that a unique symmetric equilibrium always exists under constant or decreasing absolute risk aversion. We also show that agents exert in general less efforts when they are more risk averse or when the rent is more risky.
Contest; Rent seeking; Risk; Risk aversion; Shared rents;
Economic Theory Bulletin, vol. 5, n. 2, October 2017, pp. 151–164