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Oligopolization in collective rent-seeking

Author

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  • Kaoru Ueda

    () (Faculty of Economics, Nanzan University, 18 Yamazato-cho Showa-ku, Nagoya, Aichi 466-8673, Japan)

Abstract

In this paper we discuss the issue of when oligopolization in collective rent-seeking occurs, that is, when some groups retire from rent-seeking. A complete characterization of the pure-strategy Nash equilibrium in a collective rent-seeking game among m (\geq2) heterogeneous groups is derived. The conditions of oligopolization are derived by using this result and related to the works of Nitzan [9, 10] and Hillman and Riley [3]. Also, the subgame perfect equilibrium of a simple two-stage collective rent-seeking game (Lee [7]) is fully characterized. In this game, it is confirmed that no group retires from the contest in the second stage and oligopolization never occurs. An example of the two-stage collective rent-seeking game with monitoring costs is devised to show the possibilities of oligopolization.

Suggested Citation

  • Kaoru Ueda, 2002. "Oligopolization in collective rent-seeking," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(3), pages 613-626.
  • Handle: RePEc:spr:sochwe:v:19:y:2002:i:3:p:613-626
    Note: Received: 21 September 1999/Accepted: 27 March 2001 received very helpful comments from Debraj Ray. All remaining errors are my responsibility.-->
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    Cited by:

    1. 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.
    2. María Cubel & Santiago Sanchez-Pages, 2014. "Difference-form group contests," Working Papers 2014/6, Institut d'Economia de Barcelona (IEB).
    3. Pau Balart & Sabine Flamand & Orestis Troumpounis, 2016. "Strategic choice of sharing rules in collective contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(2), pages 239-262, February.
    4. Epstein, Gil S. & Mealem, Yosef & Nitzan, Shmuel, 2011. "Political culture and discrimination in contests," Journal of Public Economics, Elsevier, vol. 95(1), pages 88-93.
    5. Nitzan, Shmuel & Ueda, Kaoru, 2009. "Collective contests for commons and club goods," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 48-55, February.
    6. Nitzan, Shmuel & Ueda, Kaoru, 2011. "Prize sharing in collective contests," European Economic Review, Elsevier, vol. 55(5), pages 678-687, June.
    7. Shmuel Nitzan & Kaoru Ueda, 2014. "Intra-group heterogeneity in collective contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 219-238, June.
    8. Santiago Sánchez-Pagés, 2007. "Endogenous coalition formation in contests," Review of Economic Design, Springer;Society for Economic Design, vol. 11(2), pages 139-163, September.
    9. Heinrich Ursprung, 2012. "The evolution of sharing rules in rent seeking contests: Incentives crowd out cooperation," Public Choice, Springer, vol. 153(1), pages 149-161, October.
    10. Priks, Mikael, 2011. "Firm competition and incentive pay: Rent seeking at work," Economics Letters, Elsevier, vol. 113(2), pages 154-156.
    11. Konrad, Kai A., 2007. "Strategy in contests: an introduction
      [Strategie in Turnieren – eine Einführung]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).
    12. Francis Bloch, 2009. "Endogenous formation of alliances in conflicts," Working Papers hal-00435387, HAL.
    13. Baik, Kyung Hwan & Dijkstra, Bouwe R. & Lee, Sanghack & Lee, Shi Young, 2006. "The equivalence of rent-seeking outcomes for competitive-share and strategic groups," European Journal of Political Economy, Elsevier, vol. 22(2), pages 337-342, June.
    14. repec:elg:eechap:15325_6 is not listed on IDEAS

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