IDEAS home Printed from https://ideas.repec.org/p/biu/wpaper/2010-06.html
   My bibliography  Save this paper

The Effect of Limited Search Ability on the Quality of Competitive Rent-Seeking Clubs

Author

Listed:
  • Shmuel Nitzan

    () (Bar-Ilan University)

  • Kobi Kriesler

    (Bar-Ilan University)

Abstract

A competitive rent-seeking club (CRSC) offers its members the chance of winning a prize (status, position, privilege) by being selected, typically, by a civil servant or a politician. The selector replaces in our setting the usual contest success function; instead of determining the winner on the basis of the club-members' efforts, he selects the winner on the basis of quality. This paper focuses on the effect of incomplete search of the selector on the efficiency of democratic self-governing and decentralized RSC's that control admittance to the club and its transparency, assuming that quality of their members is fixed. The incomplete search of the selector is assumed to take the simple form of fixed random sampling of the contestants - the members of the CRSC. Our results imply that, even when active rent-seeking expenditures are disregarded, the decisions of CRSC's regarding their composition and transparency tend to reduce quality and are therefore inefficient.

Suggested Citation

  • Shmuel Nitzan & Kobi Kriesler, 2010. "The Effect of Limited Search Ability on the Quality of Competitive Rent-Seeking Clubs," Working Papers 2010-06, Bar-Ilan University, Department of Economics.
  • Handle: RePEc:biu:wpaper:2010-06
    as

    Download full text from publisher

    File URL: http://www.biu.ac.il/soc/ec/wp/2010-06.pdf
    File Function: Working paper
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Raymond J. Deneckere & R. Preston McAfee, 1996. "Damaged Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(2), pages 149-174, June.
    2. Benesch Christine & Frey Bruno S. & Stutzer Alois, 2010. "TV Channels, Self-Control and Happiness," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-35, September.
    3. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
    4. Rubinstein, Ariel & Salant, Yuval, 2006. "A model of choice from lists," Theoretical Economics, Econometric Society, vol. 1(1), pages 3-17, March.
    5. Nti, Kofi O, 1997. "Comparative Statics of Contests and Rent-Seeking Games," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 43-59, February.
    6. Ellingsen, Tore, 1991. "Strategic Buyers and the Social Cost of Monopoly," American Economic Review, American Economic Association, vol. 81(3), pages 648-657, June.
    7. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
    8. Baik, Kyung Hwan & Kim, In-Gyu & Na, Sunghyun, 2001. "Bidding for a group-specific public-good prize," Journal of Public Economics, Elsevier, vol. 82(3), pages 415-429, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Competitive rent-seeking clubs; self governance; decentralized decisions; quality competition; selection by fixed random sampling; simple majority rule; endogenous membership determination; transparency; inefficiency; quality decay;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:biu:wpaper:2010-06. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics). General contact details of provider: http://edirc.repec.org/data/debaril.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.