Risk-aversion and prudence in rent-seeking games
This paper considers a common n-agent symmetric rent-seeking game. It derives conditions so that risk-aversion and risk always decrease rent-seeking efforts. These conditions hold for any regular contest success function when risk-averse rent-seekers are also prudent. Under n = 2, prudence is a necessary and sufficient condition for risk-aversion to decrease rent-seeking efforts compared to risk-neutrality. An intuition for this result is given based on a self-protection model.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wärneryd, Karl, 2001.
"Information in conflicts
[Information in Konflikten]," Discussion Papers, Research Unit: Market Processes and Governance FS IV 01-11, Social Science Research Center Berlin (WZB).
- Wärneryd, Karl, 2000. "Information in Conflicts," SSE/EFI Working Paper Series in Economics and Finance 388, Stockholm School of Economics.
- Miles S. Kimball, 1989.
"Precautionary Saving in the Small and in the Large,"
NBER Working Papers
2848, National Bureau of Economic Research, Inc.
- Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
- Louis Eeckhoudt & Christian Gollier, 2005.
"The impact of prudence on optimal prevention,"
Springer, vol. 26(4), pages 989-994, November.
- William Corcoran & Gordon Karels, 1985. "Efficient rents 1 rent-seeking behavior in the long-run," Public Choice, Springer, vol. 46(3), pages 227-246, January.
- Bruno Jullien & Bernard SalaniÃ© & FranÃ§ois SalaniÃ©, 1999.
"Should More Risk-Averse Agents Exert More Effort?,"
The Geneva Risk and Insurance Review,
Palgrave Macmillan, vol. 24(1), pages 19-28, June.
- Bruno Jullien & Bernard Salanié & François Salanié, 1998. "Should More Risk-Averse Agents Exert More Effort," Working Papers 98-12, Centre de Recherche en Economie et Statistique.
- Jullien, B. & Salanie, B. & Salanie, F., 1998. "Should More Risk-Averse Agents Exert More Effort?," Papers 98.489, Toulouse - GREMAQ.
- José Alcalde & Matthias Dahm, 2007.
"Tullock And Hirshleifer: A Meeting Of The Minds,"
Working Papers. Serie AD
2007-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Richard Cornes & Roger Hartley, 2012.
"Risk aversion in symmetric and asymmetric contests,"
Springer, vol. 51(2), pages 247-275, October.
- Richard Cornes & Roger Hartley, 2008. "Risk aversion in symmetric and asymmetric contests," The School of Economics Discussion Paper Series 0806, Economics, The University of Manchester.
- Hirshleifer,Jack, 2001. "The Dark Side of the Force," Cambridge Books, Cambridge University Press, number 9780521804127, October.
- Garfinkel, Michelle R. & Skaperdas, Stergios, 2007.
"Economics of Conflict: An Overview,"
Handbook of Defense Economics,
- Yann Bramoullé & Nicolas Treich, 2009. "Can Uncertainty Alleviate the Commons Problem?," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 1042-1067, 09.
- Long, Ngo Van & Vousden, Neil J, 1987. "Risk-Averse Rent Seeking with Shared Rents," Economic Journal, Royal Economic Society, vol. 97(388), pages 971-85, December.
- Malueg, David A. & Yates, Andrew J., 2005. "Equilibria and comparative statics in two-player contests," European Journal of Political Economy, Elsevier, vol. 21(3), pages 738-752, September.
- DACHRAOUI, KaÃ¯s & DIONNE, Georges & EECKHOUDT, Louis & GODFROID, Philippe, .
"Comparative mixed risk aversion: definition and application to self-protection and willingness to pay,"
CORE Discussion Papers RP
1835, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Kaïs Dachraoui & Georges Dionne & Louis Eeckhoudt & Philippe Godfroid, 2004. "Comparative Mixed Risk Aversion: Definition and Application to Self-Protection and Willingness to Pay," Journal of Risk and Uncertainty, Springer, vol. 29(3), pages 261-276, December.
- Cornes, Richard & Hartley, Roger, 2003. " Risk Aversion, Heterogeneity and Contests," Public Choice, Springer, vol. 117(1-2), pages 1-25, October.
- L. Eeckhoudt & C. Gollier & H. Schlesinger, 2005. "Economic and financial decisions under risk," Post-Print hal-00325882, HAL.
- Szidarovszky, Ferenc & Okuguchi, Koji, 1997. "On the Existence and Uniqueness of Pure Nash Equilibrium in Rent-Seeking Games," Games and Economic Behavior, Elsevier, vol. 18(1), pages 135-140, January.
- Esö, Péter & White, Lucy, 2003.
"Precautionary Bidding in Auctions,"
CEPR Discussion Papers
3975, C.E.P.R. Discussion Papers.
- Konrad, Kai A., 2007.
"Strategy in contests: an introduction
[Strategie in Turnieren – eine Einführung]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).
- Milgrom, Paul & Roberts, John, 1994. "Comparing Equilibria," American Economic Review, American Economic Association, vol. 84(3), pages 441-59, June.
- Hillman, Arye L & Katz, Eliakim, 1984. "Risk-Averse Rent Seekers and the Social Cost of Monopoly Power," Economic Journal, Royal Economic Society, vol. 94(373), pages 104-10, March.
- Hirshleifer,Jack, 2001. "The Dark Side of the Force," Cambridge Books, Cambridge University Press, number 9780521009171, October.
- Perez-Castrillo, J David & Verdier, Thierry, 1992. " A General Analysis of Rent-Seeking Games," Public Choice, Springer, vol. 73(3), pages 335-50, April.
- Konrad, Kai A & Schlesinger, Harris, 1997. "Risk Aversion in Rent-Seeking and Rent-Augmenting Games," Economic Journal, Royal Economic Society, vol. 107(445), pages 1671-83, November.
- Skaperdas, Stergios & Gan, Li, 1995. "Risk Aversion in Contests," Economic Journal, Royal Economic Society, vol. 105(431), pages 951-62, July.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:145:y:2010:i:3:p:339-349. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.