A striking difference between this paper and the previous papers is that this paper assumes contestants are risk neutral, whereas the previous papers do not. The previous papers have shown that the contestants increase their effort levels and exogenous rent-dissipation in equilibrium as the positive externalities increase, but decrease the effort levels and exogenous rent-dissipation as the negative externalities increases. Assuming that the contestants’s preferences are risk averse, this paper shows that the contestants increase their effort levels and exogenous rent-dissipation, but decrease endogenous rent-dissipation in equilibrium, as the positive externalities increase. In addition, this paper shows that the contestants decrease their effort levels and exogenous rent-dissipation, but increase endogenous rent-dissipation in equilibrium, as the negative externalities increase. The results imply that the real rent-dissipation is appropriate for measuring rent-dissipation.