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Rent-seeking group contests with one-sided private information

Author

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  • Rob Everhardt
  • Lambert Schoonbeek

Abstract

We consider a rent-seeking contest where players compete in groups for a prize of given value. One group has private information about its number of members, which can be either small or large. The other groups have possibly different but publicly known sizes. We present an explicit characterization of the groups which are active in the unique equilibrium of the game, and relate the relative magnitude of group efforts to the size of the groups. We compare the decision of each type of the privately informed group to be active in equilibrium to the corresponding decision in a benchmark game with complete information. Copyright Springer-Verlag Italia 2015

Suggested Citation

  • Rob Everhardt & Lambert Schoonbeek, 2015. "Rent-seeking group contests with one-sided private information," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 38(1), pages 55-73, April.
  • Handle: RePEc:spr:decfin:v:38:y:2015:i:1:p:55-73
    DOI: 10.1007/s10203-014-0158-1
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    References listed on IDEAS

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    1. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-1534, November.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Rent seeking; Group contest; Private information ; Group-size paradox; C7; D7;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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