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Politics of Randomness

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Author Info

  • Gil S. Epstein
  • Shmuel Nitzan

Abstract

The main drawback of the public-policy contest is that the notion of contest success function, a crucial component of the contest model, does not have micro-foundations and, therefore, the random behavior of the government seems ad-hoc. In the present paper we propose a partial micro-foundation for the public-policy contest. The possible rationalization of random government behavior is illustrated in the case of the all-pay auction and Tullock's lottery logit functions. We also clarify how stake asymmetry, lobbying-skill asymmetry and return to lobbying effort determine the relative desirability, from the government's point of view, of these CSFs

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2002/wp-cesifo-2002-10/cesifo_wp803-b.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 803.

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Date of creation: 2002
Date of revision:
Handle: RePEc:ces:ceswps:_803

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Related research

Keywords: interest groups; policy makers; lobbying; public-policy contests; contest success function; rationalization of random government's behavior;

References

References listed on IDEAS
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  1. Nti, Kofi O, 1997. "Comparative Statics of Contests and Rent-Seeking Games," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 43-59, February.
  2. Konrad, Kai A., 2002. "Investment in the absence of property rights; the role of incumbency advantages," European Economic Review, Elsevier, vol. 46(8), pages 1521-1537, September.
  3. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
  4. Gil S. Epstein & Shmuel Nitzan, 2002. "Political Culture and Monopoly Price Determination," CESifo Working Paper Series 646, CESifo Group Munich.
  5. Boyce, John R, 1994. "Allocation of Goods by Lottery," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 457-76, July.
  6. Taylor, Grant A. & Tsui, Kevin K. K. & Zhu, Lijing, 2003. "Lottery or waiting-line auction?," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1313-1334, May.
  7. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
  8. Suen, Wing, 1989. "Rationing and Rent Dissipation in the Presence of Heterogeneous Individuals," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1384-94, December.
  9. Dasgupta, Ani & Nti, Kofi O., 1998. "Designing an optimal contest," European Journal of Political Economy, Elsevier, vol. 14(4), pages 587-603, November.
  10. Gil S. Epstein & Shmuel Nitzan, 2000. "Strategic Restraint in Contests," CESifo Working Paper Series 271, CESifo Group Munich.
  11. Alberto Alesina & Alex Cukierman, 1987. "The Politics of Ambiguity," NBER Working Papers 2468, National Bureau of Economic Research, Inc.
  12. Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
  13. Lagerlof, Johan, 1997. "Lobbying, information, and private and social welfare," European Journal of Political Economy, Elsevier, vol. 13(3), pages 615-637, September.
  14. Gil S . Epstein & Shmuel Nitzan, 2002. "Endogenous Public Policy, Politicization and Welfare," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(4), pages 661-677, October.
  15. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  16. Glazer, Amihai & McMillan, Henry, 1992. "Pricing by the Firm under Regulatory Threat," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 1089-99, August.
  17. Holt, Charles A, Jr & Sherman, Roger, 1982. "Waiting-Line Auctions," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 280-94, April.
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Citations

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Cited by:
  1. Clark, Derek & Konrad, Kai A., 2006. "Contests with multi-tasking," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-14, Social Science Research Center Berlin (WZB).
  2. Gil Epstein & Shmuel Nitzan, 2006. "The struggle over migration policy," Journal of Population Economics, Springer, vol. 19(4), pages 703-723, October.
  3. Luis Corchón & Matthias Dahm, 2010. "Foundations for contest success functions," Economic Theory, Springer, vol. 43(1), pages 81-98, April.
  4. Martin Bodenstein & Heinrich Ursprung, 2001. "Political Yardstick Competition, Economic Integration, and Constitutional Choice in a Federation," CESifo Working Paper Series 501, CESifo Group Munich.
  5. Epstein, Gil S. & Nitzan, Shmuel, 2004. "Tournaments: There Is More Than Meets the Eye," IZA Discussion Papers 1023, Institute for the Study of Labor (IZA).
  6. Jia, Hao & Skaperdas, Stergios & Vaidya, Samarth, 2013. "Contest functions: Theoretical foundations and issues in estimation," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 211-222.
  7. Gil Epstein, 2006. "The political economy of population economics," Journal of Population Economics, Springer, vol. 19(2), pages 255-257, June.
  8. Stergios Skaperdas & Samarth Vaidya, 2012. "Persuasion as a contest," Economic Theory, Springer, vol. 51(2), pages 465-486, October.
  9. Gil Epstein & Shmuel Nitzan & Mordechai Schwarz, 2008. "Efforts in two-sided contests," Public Choice, Springer, vol. 136(3), pages 283-291, September.
  10. Münster, Johannes, 2008. "Group contest success functions," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-20, Social Science Research Center Berlin (WZB).
  11. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer, vol. 41(2), pages 345-357, November.
  12. Gil S. Epstein & Ira N. Gang, 2006. "Contests, NGOs, and Decentralizing Aid," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 285-296, 05.
  13. Gil S. Epstein & Shmuel Nitzan, 2005. "Lobbying and Compromise," CESifo Working Paper Series 1413, CESifo Group Munich.

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