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Contests with interdependent preferences

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Listed author(s):
  • Sherrill Shaffer

Abstract

Relaxing the common assumption of purely self-interested preferences in contests, it is shown that altruism (bilateral or unilateral) reduces equilibrium rent-seeking effort. The effects on net payoffs are more complex. Strategic interdependence is possible, but the symmetric equilibrium is pure self-interest.

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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 13 ()
Pages: 877-880

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:13:p:877-880
DOI: 10.1080/13504850500425477
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  1. Chung, Tai-Yeong, 1996. "Rent-Seeking Contest When the Prize Increases with Aggregate Efforts," Public Choice, Springer, vol. 87(1-2), pages 55-66, April.
  2. James Andreoni, 1995. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 1-21.
  3. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-155, May.
  4. Hirshleifer, Jack, 1995. "Theorizing about conflict," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 7, pages 165-189 Elsevier.
  5. Fontanel, Jacques, 1995. "The economics of disarmament," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 19, pages 563-590 Elsevier.
  6. James Andreoni & Lise Vesterlund, 2001. "Which is the Fair Sex? Gender Differences in Altruism," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 293-312.
  7. Fudenberg, Drew & Tirole, Jean, 1984. "The Fat-Cat Effect, the Puppy-Dog Ploy, and the Lean and Hungry Look," American Economic Review, American Economic Association, vol. 74(2), pages 361-366, May.
  8. O'Neill, Barry, 1994. "Game theory models of peace and war," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 29, pages 995-1053 Elsevier.
  9. Mui, Vai-Lam, 1995. "The economics of envy," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 311-336, May.
  10. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-898, December.
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Cited by:

  1. Sina Risse, 2011. "Two-stage group rent-seeking with negatively interdependent preferences," Public Choice, Springer, vol. 147(3), pages 259-276, June.
  2. Frederik Schmidt, 2009. "Evolutionary stability of altruism and envy in Tullock contests," Economics of Governance, Springer, vol. 10(3), pages 247-259, July.

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