Two-Stage Rent-Seeking Contests with Carryovers
We examine a two-stage contest in which players in two groups compete noncooperatively to win a rent. In the first stage, each group selects a finalist. The two finalists compete for the rent in the second stage. First-stage efforts are carried over to the second stage in the sense that they are partly effective in the second stage as well. We show the following. In the case of player-specific carryovers, the rent-dissipation rate increases in the carryover rate. With the carryover rate equal to one, the rent is fully dissipated. In the case of group-specific carryovers, however, the rent-dissipation rate is independent of the carryover rate. Copyright 2000 by Kluwer Academic Publishers
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