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A model of strategic delegation in contests between groups

  • Stefan Brandauer
  • Florian Englmaier

    ()

We analyze a contest between two groups where group members have differing valuations for the contested rent. Generically the pivotal group member with the median valuation of the rent will not act himself but will want to send a group member that has preferences different to her own into the contest. The delegation can be either to more or less 'radical' group members. The direction of delegation depends on the order of moves and the relative 'aggressiveness' of the group medians. We show that almost certainly very asymmetric equilibria arise, even if the median group members value the rent (almost) equally. Delegation can lead to a social improvement in terms of resources spent in the contest.

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File URL: http://hdl.handle.net/10.1007/s10058-008-0058-3
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Article provided by Springer in its journal Review of Economic Design.

Volume (Year): 13 (2009)
Issue (Month): 3 (September)
Pages: 205-232

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Handle: RePEc:spr:reecde:v:13:y:2009:i:3:p:205-232
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