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The Evolution of Sharing Rules in Rent Seeking Contests: Incentives Crowd Out Cooperation

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  • Heinrich Ursprung

    ()
    (Department of Economics, University of Konstanz, Germany)

Abstract

Modern societies are characterized by competing organizations that rely predominantly on incentive schemes to align the behavior of their members with the organizations’ objectives. This study contributes to explaining why in so many cases incentive schemes have gradually crowded out cooperation as an organization device. Our explanation does not draw on free-riding, the obvious Achilles’ heel of cooperation, but relies completely on fundamental group contest mechanisms. By investigating a canonical rent seeking model and adopting an evolutionary perspective, the analysis identifies shortcomings in previous results, sets the record straight, and explains why the process of incentivizing organizations is protracted.

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Bibliographic Info

Paper provided by Department of Economics, University of Konstanz in its series Working Paper Series of the Department of Economics, University of Konstanz with number 2011-02.

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Length: 19 pages
Date of creation: 21 Feb 2011
Date of revision:
Handle: RePEc:knz:dpteco:1102

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Related research

Keywords: group contests; rent-seeking; sharing rules; cooperation;

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References

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Cited by:
  1. Kahana, Nava & Klunover, Doron, 2014. "Rent Seeking and the Excess Burden of Taxation," IZA Discussion Papers 8160, Institute for the Study of Labor (IZA).

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