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The strategic advantage of interdependent preferences in rent-seeking contests

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  • T. Guse
  • B. Hehenkamp

    ()

Abstract

We study rent-seeking contests, where the set of players contains two groups of players – one with independent preferences and the other with (negatively) interdependent preferences. It turns out that the latter experience a strategic advantage in general two-player contests and in n-player-contests with non-increasing marginal efficiency. For general n-player contests with increasing marginal efficiency, the strategic advantage prevails provIDed convexity of contest technologies is sufficiently weak. For strongly convex contest technologies, other types of equilibria exist, including one where indivIDualists receive strictly higher pay-off. Copyright Springer Science + Business Media B.V. 2006

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 129 (2006)
Issue (Month): 3 (December)
Pages: 323-352

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Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:323-352

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Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Krakel, Matthias & Sliwka, Dirk, 2006. "Strategic delegation and mergers in oligopolistic contests," Journal of Economics and Business, Elsevier, vol. 58(2), pages 119-136.
  2. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1993. "The Solution to the Tullock Rent-Seeking Game when r>2: Mixed-Strategy Equilibria and Mean Dissipation Rates," Purdue University Economics Working Papers 1039, Purdue University, Department of Economics.
  3. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
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  9. Bush, C.A., 1994. "Interdependence Preferences and Status in Consumption: Empirical Evidence," RCER Working Papers 387, University of Rochester - Center for Economic Research (RCER).
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  13. Burkhard Hehenkamp & Wolfgang Leininger & Alex Possajennikov, 2003. "Evolutionary Equilibrium in Tullock Contests: Spite and Overdissipation," Discussion Papers in Economics 03_01, University of Dortmund, Department of Economics.
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  15. Baye, Michael R. & Hoppe, Heidrun C., 2003. "The strategic equivalence of rent-seeking, innovation, and patent-race games," Games and Economic Behavior, Elsevier, vol. 44(2), pages 217-226, August.
  16. Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-27, August.
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  18. Perez-Castrillo, J David & Verdier, Thierry, 1992. " A General Analysis of Rent-Seeking Games," Public Choice, Springer, vol. 73(3), pages 335-50, April.
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Cited by:
  1. Sina Risse, 2011. "Two-stage group rent-seeking with negatively interdependent preferences," Public Choice, Springer, vol. 147(3), pages 259-276, June.
  2. Wolfgang Leininger, 2008. "Evolutionarily Stable Preferences in Contests," CESifo Working Paper Series 2343, CESifo Group Munich.
  3. Frederik Schmidt, 2009. "Evolutionary stability of altruism and envy in Tullock contests," Economics of Governance, Springer, vol. 10(3), pages 247-259, July.
  4. Wolfgang Leininger, 2008. "Evolutionarily Stable Preferences in Contests," Ruhr Economic Papers 0049, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Christian Rusche, 2011. "Does Delegation Help to Prevent Spiteful Behavior?," Ruhr Economic Papers 0270, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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