Optimality of winner-take-all contests: the role of attitudes toward risk

This paper studies the role of risk attitudes in determining optimality winner-take-all contests. We compare typical single-winner lottery contest with two alternatives, both spreading rewards to more players: through holding multiple prize-giving competitions or guaranteeing a bottom prize for losers. In first comparison, we find that multiple-competition is as effective when contestants are neutral, but former induces effort than latter averse and prudent. second always dominated by could have an advantage over prudent, it likely so become