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Alternative intervention mechanisms in rent-seeking contests

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  • Friedhelm Hentschel

    (SIAW-HSG, University of St. Gallen)

Abstract

This paper models a rent-seeking contest which allows for the provision of third-party support. Support can be either provided by reducing the supported player’s cost of fighting or by increasing the ability to fight. I present and solve a rent-seeking contest which nests these two intervention mechanisms. Among others, I find that for identical intervention costs of the two mechanisms, the intervention mechanism becomes irrelevant for the outcome of the contest if the supported player’s cost ability parameter as well as the ability to fight are identical. Additionaly, the model endogenizes the third party’s choice of the applicable intervention mechanism. Among others, I find that different intervention mechanisms can lead to identical outcomes, despite different levels of fighting efforts.

Suggested Citation

  • Friedhelm Hentschel, 2023. "Alternative intervention mechanisms in rent-seeking contests," Economics of Governance, Springer, vol. 24(4), pages 453-471, December.
    • Handle: RePEc:spr:ecogov:v:24:y:2023:i:4:d:10.1007_s10101-023-00298-1
    DOI: 10.1007/s10101-023-00298-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Rent-seeking; Conflict; Lottery contest; Third-party intervention; Intervention mechanism;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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