Risk-Averse Rent Seeking with Shared Rents
AbstractThis paper presents a Nash equilibrium model of rent-seeking behavior in which risk-averse players expend resources to obtain a share of a rent, as for example in contests for import quota licences. Results are obtained relating the equilibrium level of lobbying effort by each player to the value of the rent. In particular, reduced individual lobbying effort is associated with higher rents contested if players are sufficiently risk averse. The question of whether the value of rents is a good measure of the resource cost of rent seeking is also considered. A simple approximation involving risk and risk-aversion parameters is derived for the proportion of rents dissipated in long-run equilibrium. Risk and risk aversion are seen to reduce the rent-dissipation ratio below unity. Copyright 1987 by Royal Economic Society.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 97 (1987)
Issue (Month): 388 (December)
Contact details of provider:
Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
Phone: +44 1334 462479
Web page: http://www.res.org.uk/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Timothy N. Cason & William A. Masters & Roman M. Sheremeta, 2010.
"Entry into Winner-Take-All and Proportional-Prize Contests: An Experimental Study,"
10-10, Chapman University, Economic Science Institute.
- Cason, Timothy N. & Masters, William A. & Sheremeta, Roman M., 2010. "Entry into winner-take-all and proportional-prize contests: An experimental study," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 604-611, October.
- Timothy N. Cason & William A. Masters & Roman M. Sheremeta, 2010. "Entry Into Winner-Take-All And Proportional-Prize Contests:An Experimental Study," Purdue University Economics Working Papers 1231, Purdue University, Department of Economics.
- Cason, Timothy & Masters, William & Sheremeta, Roman, 2010. "Entry into Winner-Take-All and Proportional-Prize Contests: An Experimental Study," MPRA Paper 49886, University Library of Munich, Germany.
- TREICH Nicolas, 2009.
"Risk-aversion and Prudence in Rent-seeking Games,"
LERNA Working Papers
09.05.281, LERNA, University of Toulouse.
- Toshihiro Ihori & C. Yang, 2012. "Laffer paradox, Leviathan, and political contest," Public Choice, Springer, vol. 151(1), pages 137-148, April.
- David Schmidt & Robert S. Shupp & James Walker, 2005.
"Resource Allocation Contests: Experimental Evidence,"
200506, Ball State University, Department of Economics, revised Feb 2005.
- Shupp, Robert & Sheremeta, Roman M. & Schmidt, David & Walker, James, 2013. "Resource allocation contests: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 257-267.
- Shupp, Robert & Sheremeta, Roman, 2013. "Resource Allocation Contests: Experimental Evidence," MPRA Paper 49889, University Library of Munich, Germany.
- Robert Shupp & Roman M. Sheremeta & David Schmidt & James Walker, 2013. "Resource Allocation Contests: Experimental Evidence," Working Papers 13-23, Chapman University, Economic Science Institute.
- David Schmidt & Robert Shupp & James M. Walker, 2005. "Resource Allocation Contests: Experimental Evidence," Caepr Working Papers 2006-004, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Aug 2006.
- Clark, Derek J. & Foros, Øystein & Sand, Jan Yngve, 2009.
"Foreclosure in contests,"
2008/27, Department of Business and Management Science, Norwegian School of Economics.
- Jean-Daniel Guigou & Bruno Lovat & Marc Boissaux, 2013. "Asymmetric contests with risky rents," CREA Discussion Paper Series 13-9, Center for Research in Economic Analysis, University of Luxembourg.
- Richard Cornes & Roger Hartley, 2008.
"Risk aversion in symmetric and asymmetric contests,"
The School of Economics Discussion Paper Series
0806, Economics, The University of Manchester.
- Richard Cornes & Roger Hartley, 2012. "Risk aversion in symmetric and asymmetric contests," Economic Theory, Springer, vol. 51(2), pages 247-275, October.
- Arye L. Hillman & John G. Riley, 1987.
"Politically Contestable Rents and Transfers,"
UCLA Economics Working Papers
452, UCLA Department of Economics.
- Roman M. Sheremeta & William A. Masters & Timothy N. Cason, 2012. "Winner-Take-All and Proportional-Prize Contests: Theory and Experimental Results," Working Papers 12-04, Chapman University, Economic Science Institute.
- Liston-Heyes, Catherine, 2001. "Setting the Stakes in Environmental Contests," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 1-12, January.
- Marco Sahm, 2010. "The Contest Winner: Gifted or Venturesome?," CESifo Working Paper Series 3285, CESifo Group Munich.
- Jean-Daniel Guigou & Bruno Lovat & Marc Boissaux, 2013. "Asymmetric contests with risky rents," LSF Research Working Paper Series 13-9, Luxembourg School of Finance, University of Luxembourg.
- Dieter Bös, 2002. "Contests Among Bureaucrats," Bonn Econ Discussion Papers bgse27_2002, University of Bonn, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.