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Politics of Randomness

  • Gil S. Epstein
  • Shmuel Nitzan

The main drawback of the public-policy contest is that the notion of contest success function, a crucial component of the contest model, does not have micro-foundations and, therefore, the random behavior of the government seems ad-hoc. In the present paper we propose a partial micro-foundation for the public-policy contest. The possible rationalization of random government behavior is illustrated in the case of the all-pay auction and Tullock's lottery logit functions. We also clarify how stake asymmetry, lobbying-skill asymmetry and return to lobbying effort determine the relative desirability, from the government's point of view, of these CSFs

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 803.

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Date of creation: 2002
Date of revision:
Handle: RePEc:ces:ceswps:_803
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  1. repec:oup:qjecon:v:105:y:1990:i:4:p:829-50 is not listed on IDEAS
  2. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer, vol. 7(2), pages 283-290.
  3. Gil S. Epstein & Shmuel Nitzan, 2000. "Strategic Restraint in Contests," CESifo Working Paper Series 271, CESifo Group Munich.
  4. Konrad, Kai A., 2001. "Investment in the Absence of Property Rights: The Role of Incumbency Advantages," CEPR Discussion Papers 3050, C.E.P.R. Discussion Papers.
  5. Suen, Wing, 1989. "Rationing and Rent Dissipation in the Presence of Heterogeneous Individuals," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1384-94, December.
  6. Taylor, Grant A. & Tsui, Kevin K. K. & Zhu, Lijing, 2003. "Lottery or waiting-line auction?," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1313-1334, May.
  7. Gil S. Epstein & Shmuel Nitzan, 2003. "Political culture and monopoly price determination," Social Choice and Welfare, Springer, vol. 21(1), pages 1-19, 08.
  8. Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
  9. Alberto Alesina & Alex Cukierman, 1987. "The Politics of Ambiguity," NBER Working Papers 2468, National Bureau of Economic Research, Inc.
  10. repec:oup:qjecon:v:107:y:1992:i:3:p:1089-99 is not listed on IDEAS
  11. repec:oup:qjecon:v:98:y:1983:i:3:p:371-400 is not listed on IDEAS
  12. Holt, Charles A, Jr & Sherman, Roger, 1982. "Waiting-Line Auctions," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 280-94, April.
  13. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  14. Gil S . Epstein & Shmuel Nitzan, 2002. "Endogenous Public Policy, Politicization and Welfare," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(4), pages 661-677, October.
  15. 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.
  16. Lagerlof, Johan, 1997. "Lobbying, information, and private and social welfare," European Journal of Political Economy, Elsevier, vol. 13(3), pages 615-637, September.
  17. Dasgupta, Ani & Nti, Kofi O., 1998. "Designing an optimal contest," European Journal of Political Economy, Elsevier, vol. 14(4), pages 587-603, November.
  18. Boyce, John R, 1994. "Allocation of Goods by Lottery," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 457-76, July.
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