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Governing Interest Groups and Rent Dissipation

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  • GIL S. EPSTEIN
  • YOSEF MEALEM

Abstract

In a contest group - specific public goods we consider the effect that managing an interest group has on the rent dissipation and the total expected payoffs of the contest. While in the first group, there is a central planner determining its members’ expenditure in the contest, in the second group there are two different possibilities: either all the members are governed by a central planner or they aren’t. We consider both types of contests: an all pay auction and a Logit contest success function. We show that while governing an interest group decreases free-riding, it may as well decrease the rent dissipation; at the same time the expected payoffs from the groups may also decrease.
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  • Gil S. Epstein & Yosef Mealem, 2012. "Governing Interest Groups and Rent Dissipation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(3), pages 423-440, June.
  • Handle: RePEc:bla:jpbect:v:14:y:2012:i:3:p:423-440 DOI: j.1467-9779.2012.01549.x
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    Cited by:

    1. Epstein, Gil S. & Mealem, Yosef, 2013. "Politicians, Governed vs. Non-Governed Interest Groups and Rent Dissipation," IZA Discussion Papers 7736, Institute for the Study of Labor (IZA).
    2. Gil Epstein & Yosef Mealem, 2015. "Politicians, governed versus non-governed interest groups and rent dissipation," Theory and Decision, Springer, vol. 79(1), pages 133-149, July.

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