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Returns to effort in rent-seeking games

Author

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  • Giuseppe Dari-Mattiacci
  • Francesco Parisi

Abstract

In the traditional formulation of rent-seeking games, increasing returns to effort are characterized by an exponent r>1. However, when the value of the rent is normalized to 1, the players’ effort levels A and B will typically be less than 1. Thus, when A>1 and r>1, the value of A r decreases as r increases, contradicting the interpretation of r>1 as representing increasing returns to effort. This apparent defect in the mathematization of the problem seems to suggest that a different interpretation of r is required whenever A>1, upsetting the uniformity and elegance of the model. In this short note, we demonstrate that the perceived problem is illusory, and that the usual interpretation of r is satisfactory for all values of A. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Giuseppe Dari-Mattiacci & Francesco Parisi, 2014. "Returns to effort in rent-seeking games," Public Choice, Springer, vol. 159(1), pages 99-104, April.
    • Handle: RePEc:kap:pubcho:v:159:y:2014:i:1:p:99-104
    DOI: 10.1007/s11127-012-0020-3
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    References listed on IDEAS

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    1. Giuseppe Dari-Mattiacci & Eric Langlais & Bruno Lovat & Francesco Parisi, 2007. "Crowding-out in productive and redistributive rent-seeking," Public Choice, Springer, vol. 133(1), pages 199-229, October.
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    Cited by:

    1. Osório, António (António Miguel) & Luppi, Barbara, 2019. "Argumentation Quantity and Quality: A Litigation Success Function," Working Papers 2072/376027, Universitat Rovira i Virgili, Department of Economics.
    2. Randall G. Holcombe, 2017. "Political incentives for rent creation," Constitutional Political Economy, Springer, vol. 28(1), pages 62-78, March.
    3. Heijnen, Pim & Schoonbeek, Lambert, 2019. "Rent-seeking with uncertain discriminatory power," European Journal of Political Economy, Elsevier, vol. 56(C), pages 103-114.
    4. Giuseppe Dari-Mattiacci & Eric Langlais & Bruno Lovat & Francesco Parisi, 2013. "Asymmetries in Rent-Seeking," EconomiX Working Papers 2013-5, University of Paris Nanterre, EconomiX.
    5. repec:elg:eechap:15325_5 is not listed on IDEAS
    6. Parisi Francesco, 2020. "Law and Economics as We Grow Younger," Review of Law & Economics, De Gruyter, vol. 16(1), pages 1-20, March.
    7. Deffains, Bruno & Demougin, Dominique & Desrieux, Claudine, 2017. "Choosing ADR or litigation," International Review of Law and Economics, Elsevier, vol. 49(C), pages 33-40.
    8. Carbonara Emanuela & Parisi Francesco & von Wangenheim Georg, 2015. "Rent-Seeking and Litigation: The Hidden Virtues of Limited Fee Shifting," Review of Law & Economics, De Gruyter, vol. 11(2), pages 113-148, July.

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    More about this item

    Keywords

    Rent-seeking games; Returns to effort; Normalization of values; D72;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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