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Rent seeking in sequential group contests

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  • Gürtler, Oliver
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    Abstract

    In this paper, a group contest is analyzed, where the groups are allowed to determine their sharing rules either sequentially or simultaneously. It is found that in case the more numerous group determines its sharing rule prior to the smaller group, rent dissipation in the group contest is higher than in an individual contest. However, if the order of moves is endogenized, the smaller group will always act prior to the bigger group. Competition between the groups is in this way weakened and the groups are able to save on expenditures.

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    Bibliographic Info

    Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 47.

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    Date of creation: May 2005
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    Handle: RePEc:trf:wpaper:47

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    Keywords: Group contest; rent seeking; sequential choices; sharing rule;

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    1. Morgan, John, 2003. " Sequential Contests," Public Choice, Springer, Springer, vol. 116(1-2), pages 1-18, July.
    2. Lee, Sanghack & Hyeong Kang, J., 1998. "Collective contests with externalities," European Journal of Political Economy, Elsevier, vol. 14(4), pages 727-738, November.
    3. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer, Springer, vol. 7(2), pages 283-290.
    4. Christian Riis & Derek J. Clark, 1997. "Contest success functions: an extension," Economic Theory, Springer, Springer, vol. 11(1), pages 201-204.
    5. Nitzan, Shmuel, 1991. " Rent-Seeking with Non-identical Sharing Rules," Public Choice, Springer, Springer, vol. 71(1-2), pages 43-50, August.
    6. Hwan Baik, Kyung & Lee, Sanghack, 1997. "Collective rent seeking with endogenous group sizes," European Journal of Political Economy, Elsevier, vol. 13(1), pages 121-130, February.
    7. Kyle Bagwell, 1992. "Commitment and Observability in Games," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1014, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. Akerlof, George A, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 90(4), pages 599-617, November.
    9. Dye, Ronald A, 1984. "The Trouble with Tournaments," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 22(1), pages 147-49, January.
    10. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(409), pages 1522-34, November.
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