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Tullock's Rent-Seeking Contest with a Minimum Expenditure Requirement

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  • Schoonbeek, Lambert
  • Kooreman, Peter

Abstract

The authors consider a rent-seeking contest of the kind introduced by Tullock (1980) in which two players compete for a monopoly rent. They extend the contest by requiring that if a player puts forward an effort, his expenditures must be larger than or equal to some minimum level. The authors show that, depending on the model parameters, the number of Nash equilibria of the extended model can be zero, one, two, or four. Furthermore, it turns out that the extent of rent dissipation in a Nash equilibrium of the extended model can be larger than, equal to, or smaller than the extent of rent dissipation in the unique Nash equilibrium of the original model. Copyright 1997 by Kluwer Academic Publishers

Suggested Citation

  • Schoonbeek, Lambert & Kooreman, Peter, 1997. "Tullock's Rent-Seeking Contest with a Minimum Expenditure Requirement," Public Choice, Springer, vol. 93(3-4), pages 477-486, December.
  • Handle: RePEc:kap:pubcho:v:93:y:1997:i:3-4:p:477-86
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    Cited by:

    1. ISKAKOV, Mikhail & ISKAKOV, Alexey & ZAKHAROV, Alexey, 2014. "Equilibria in secure strategies in the Tullock contest," CORE Discussion Papers 2014010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Johannes Münster, 2007. "Rents, dissipation and lost treasures: Comment," Public Choice, Springer, vol. 130(3), pages 329-335, March.
    3. 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.
    4. HHironori Otsubo, 2012. "Contests with Incumbency Advantages: An Experiment Investigation of the Effect of Limits on Spending Behavior and Outcome," Jena Economic Research Papers 2012-020, Friedrich-Schiller-University Jena.
    5. Hironori Otsubo, 2013. "Do campaign spending limits diminish competition? An experiment," Economics Bulletin, AccessEcon, vol. 33(3), pages 2223-2234.
    6. Münster, Johannes, 2006. "Rents, dissipation and lost treasures: comment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 119, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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