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The design of rent-seeking competitions

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  • Robert Michaels

Abstract

In the standard Tullock model of rent-seeking as a noncooperative game, aggregate expenditures by seekers can equal, exceed, or fall short of total rents depending on what is assumed about the number of seekers and the marginal return to a seeker's investment. If the supply of an input into the rent-seeking process is controlled by a politician who receives payment from seekers for it, the indeterminacy of the process becomes a less serious problem. He supplies it and designs the rent-seeking game to maximize his wealth. The author derives expressions for the number of seekers and the marginal return parameter which maximize the politician's wealth in one-input and two-input rent-seeking processes. Copyright Martinus Nijhoff Publishers 1988

Suggested Citation

  • Robert Michaels, 1988. "The design of rent-seeking competitions," Public Choice, Springer, vol. 56(1), pages 17-29, January.
    • Handle: RePEc:kap:pubcho:v:56:y:1988:i:1:p:17-29
    DOI: 10.1007/BF00052067
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    References listed on IDEAS

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    1. Gordon Tullock, 1984. "Long-run equilibrium and total expenditures in rent-seeking: A comment," Public Choice, Springer, vol. 43(1), pages 95-97, January.
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    10. William Corcoran, 1984. "Long-run equilibrium and total expenditures in rent-seeking," Public Choice, Springer, vol. 43(1), pages 89-94, January.
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    12. William Corcoran & Gordon Karels, 1985. "Efficient rents 1 rent-seeking behavior in the long-run," Public Choice, Springer, vol. 46(3), pages 227-246, January.
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    Citations

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    Cited by:

    1. Gil S. Epstein & Yosef Mealem & Shmuel Nitzan, 2013. "Lotteries vs. All-Pay Auctions in Fair and Biased Contests," Economics and Politics, Wiley Blackwell, vol. 25(1), pages 48-60, March.
    2. Camilla Mastromarco & Marco Runkel, 2009. "Rule changes and competitive balance in Formula One motor racing," Applied Economics, Taylor & Francis Journals, vol. 41(23), pages 3003-3014.
    3. Wang Zhewei, 2010. "The Optimal Accuracy Level in Asymmetric Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-18, April.
    4. Cugno, Franco & Ferrero, Mario, 2004. "Competition among volunteers," European Journal of Political Economy, Elsevier, vol. 20(3), pages 637-654, September.
    5. Ivo Bischoff & Frédéric Blaeschke, 2013. "Incentives and Influence Activities in the Public Sector: the Trade-off in Performance Budgeting and Conditional Grants," MAGKS Papers on Economics 201320, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Ivo Bischoff & Frédéric Blaeschke, 2012. "Window-Dressing and Lobbying in Performance-Budgeting: a Model for the Public Sector," MAGKS Papers on Economics 201212, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. Clark, Derek J. & Riis, Christian, 1998. "Influence and the discretionary allocation of several prizes," European Journal of Political Economy, Elsevier, vol. 14(4), pages 605-625, November.
    8. Feng, Xin, 2020. "Information disclosure on the contest mechanism," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 148-156.
    9. Lim, Wooyoung & Matros, Alexander, 2009. "Contests with a stochastic number of players," Games and Economic Behavior, Elsevier, vol. 67(2), pages 584-597, November.
    10. Alexander Matros, 2007. "Contests with a Stochastic Number of Players," Working Paper 323, Department of Economics, University of Pittsburgh, revised Sep 2008.
    11. Mustafa Yildirim, 2015. "Accuracy in contests: players’ perspective," Review of Economic Design, Springer;Society for Economic Design, vol. 19(1), pages 67-90, March.
    12. Dijkstra, Bouwe R., 1998. "A two-stage rent-seeking contest for instrument choice and revenue division, applied to environmental policy," European Journal of Political Economy, Elsevier, vol. 14(2), pages 281-301, May.
    13. Robert Michaels, 1989. "Conjectural variations and the nature of equilibrium in rent-seeking models," Public Choice, Springer, vol. 60(1), pages 31-39, January.
    14. XiaoGang Che & Brad Humphreys, 2014. "Contests with a Prize Externality and Stochastic Entry," Working Papers 14-19, Department of Economics, West Virginia University.
    15. Dongryul Lee & Joon Song, 2019. "Optimal Team Contests to Induce More Efforts," Journal of Sports Economics, , vol. 20(3), pages 448-476, April.
    16. Nti, Kofi O., 2004. "Maximum efforts in contests with asymmetric valuations," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1059-1066, November.
    17. Tomohiko Kawamori, 2020. "Extractive contest design," Papers 2006.01808, arXiv.org, revised Jul 2022.
    18. Lukas Block, 2022. "Coalition formation versus free riding in rent-seeking contests," Working Papers Dissertations 93, Paderborn University, Faculty of Business Administration and Economics.
    19. Daniel Rehsmann & Béatrice Roussillon & Paul Schweinzer, 2023. "Contesting Fake News," CESifo Working Paper Series 10632, CESifo.
    20. Jia, Hao & Sun, Ching-jen, 2021. "The optimal entry fee-prize ratio in Tullock contests," Journal of Mathematical Economics, Elsevier, vol. 96(C).

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