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Multi-period rent-seeking contests with carryover: Theory and experimental evidence

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  • Pamela Schmitt
  • Robert Shupp
  • Kurtis Swope
  • John Cadigan

Abstract

This paper develops and experimentally tests a model in which a player’s effort affects the probability of winning a contest in both the current and future periods. Theory predicts that rent-seeking effort will be shifted forward from later to earlier periods, with no change in overall rent-seeking expenditures relative to the static contest. Experimental results indicate a significant shift forward when “carryover” is present and that the amount shifted is directly related to the carryover rate. Finally, although experimental expenditures are greater than the equilibrium predictions, overall rent-seeking effort in the carryover contests is lower than in similar static contests. Copyright Springer-Verlag Berlin/Heidelberg 2004

Suggested Citation

  • Pamela Schmitt & Robert Shupp & Kurtis Swope & John Cadigan, 2004. "Multi-period rent-seeking contests with carryover: Theory and experimental evidence," Economics of Governance, Springer, vol. 5(3), pages 187-211, November.
  • Handle: RePEc:spr:ecogov:v:5:y:2004:i:3:p:187-211
    DOI: 10.1007/s10101-004-0075-9
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