Multi-Period Rent-Seeking Contests with Carryover: Theory and Experimental Evidence
AbstractThe majority of theoretical and experimental research stemming from Tullock’s (1980) model of rent-seeking considers static, single-period contests. This paper contributes to a growing body of research on multi-period rent-seeking contests by developing and experimentally testing a model in which a player’s effort affects the probability of winning a contest in both the current and future periods. Theory predicts that rent-seeking effort will be shifted forward from later to earlier periods, with no change in overall rent-seeking expenditures relative to the static contest. Experimental results indicate a significant shift forward when “carryover” is present and that the amount shifted is directly related to the carryover rate. Finally, although experimental expenditures are greater than the equilibrium predictions, overall rent-seeking effort in the carryover contests is lower than in similar static contests.
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Bibliographic InfoPaper provided by United States Naval Academy Department of Economics in its series Departmental Working Papers with number 5.
Length: 30 pages
Date of creation: Apr 2004
Date of revision:
Other versions of this item:
- Pamela Schmitt & Robert Shupp & Kurtis Swope & John Cadigan, 2004. "Multi-period rent-seeking contests with carryover: Theory and experimental evidence," Economics of Governance, Springer, vol. 5(3), pages 187-211, November.
- NEP-ALL-2004-04-11 (All new papers)
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Open Access publications from Tilburg University
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