Yeah, but it's kind of a Pascal's Wager:

Normal investment: maximize expected profit

Competition investment: maximize the probability of your profit being the best in the pool

Normal strategy: 100% chance of losing the competition. Extremely risky strategy: 99.99% of losing - who cares by how much? There's this 0.01% of winning and it's all that matters.

Losing doesn't cost anything because you aren't playing with real money. You get the same payout from -100% returns as you would with 20% returns.

The argument even applies to competitions where you play with your own real money. Any non-zero prize moves the slider a bit towards the riskier strategies.