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Equilibria in secure strategies in the Tullock contest

Author

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  • ISKAKOV, Mikhail

    (V.A. Trapeznikov Institute of Control Sciences, Moscow)

  • ISKAKOV, Alexey

    (V.A. Trapeznikov Institute of Control Sciences, Moscow)

  • ZAKHAROV, Alexey

    (Higher School of Economics, Moscow)

Abstract

It is well known that a pure-strategy Nash equilibrium does not exist for a two-player rent-seeking contest when the contest success function parameter is greater than two. We analyze the contest using the concept of equilibrium in secure strategies, which is a generalization of the Nash equilibrium. It is defined by two conditions: (i) no player can make a profitable deviation that decreases the payoff of another player and (ii), for any profitable deviation there is a subsequent deviation by another player, that is profitable for the second deviator and worse than the status quo for the first deviator. We show that such equilibrium always exists in the Tullock contest. Moreover, when the success function parameter is greater than two, this equilibrium is unique up to a permutation of players, and has a lower rent dissipation than in a mixed-strategy Nash equilibrium.

Suggested Citation

  • ISKAKOV, Mikhail & ISKAKOV, Alexey & ZAKHAROV, Alexey, 2014. "Equilibria in secure strategies in the Tullock contest," LIDAM Discussion Papers CORE 2014010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2014010
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    References listed on IDEAS

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    Cited by:

    1. Iskakov, M. & Iskakov, A. & d'Aspremont, C., 2018. "Games for cautious players: The Equilibrium in Secure Strategies," Games and Economic Behavior, Elsevier, vol. 110(C), pages 58-70.

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    More about this item

    Keywords

    rent-seeking; Tullock contest; equilibrium in secure strategies; rent dissipation; non-cooperative games;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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