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Rent-seeking contests with private valuations

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  • Andrea Gallice

Abstract

We study a rent-seeking contest in which players have heterogeneous and private valuations. In addition to their own type, agents only know that all valuations are drawn from an unspeciÂ…ed distribution, of which they only know the mean. We obtain a closed-form solution for agentsÂ’ optimal level of investment and subject it to comparative statics analy- sis. We also investigate the issue of entry in the game and the amount of rent dissipation that results in equilibrium. Finally, we compare our results with those that would emerge in a context of perfect information.

Suggested Citation

  • Andrea Gallice, 2014. "Rent-seeking contests with private valuations," Carlo Alberto Notebooks 390, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:390
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    References listed on IDEAS

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    More about this item

    Keywords

    rent-seeking; contests; private information; imperfect information.;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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