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Endogenous timing in general rent-seeking and conflict models

Author

Listed:
  • Magnus Hoffmann

    (TUB - Technical University of Berlin / Technische Universität Berlin)

  • Grégoire Rota-Graziosi

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

We examine simultaneous versus sequential choice of effort in a two-player contest. The timing of moves, determined in a preplay stage prior to the contest subgame, as well as the value of the prize is allowed to be endogenous. Contrary to endogenous timing models with an exogenously fixed prize the present paper finds the following: (1) Players may decide to choose their effort simultaneously in the subgame perfect equilibrium (SPE) of the extended game. (2) The SPE does not need to be unique, in particular, there is no unique SPE with sequential moves if the direct costs of effort are zero. (3) Symmetry among players does not rule out incentives for precommitment to effort locally away from the Cournot-Nash level. (4) Finally, there may be no correlation between win probability and strategic incentives in our framework; a finding most central in the analysis of fixedprize contests.

Suggested Citation

  • Magnus Hoffmann & Grégoire Rota-Graziosi, 2012. "Endogenous timing in general rent-seeking and conflict models," Post-Print halshs-00689738, HAL.
    • Handle: RePEc:hal:journl:halshs-00689738
    DOI: 10.1016/j.geb.2011.12.001
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    Cited by:

    1. Hadi Yektaş & Magnus Hoffmann & Friedhelm Hentschel & Roland Hodler, 2019. "Wars of Conquest and Independence," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 175(4), pages 617-640.
    2. Hoffmann, Magnus & Kolmar, Martin, 2017. "Distributional preferences in probabilistic and share contests," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 120-139.
    3. Kyung Hwan Baik & Jong Hwa Lee & Seokho Lee, 2022. "Endogenous timing in three-player Tullock contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(3), pages 495-523, October.
    4. Keskin, Kerim, 2018. "Cumulative prospect theory preferences in rent-seeking contests," Mathematical Social Sciences, Elsevier, vol. 96(C), pages 85-91.
    5. Grégoire ROTA-GRAZIOSI, 2016. "Implementing Tax Coordination and Harmonization through Voluntary Commitment," Working Papers P181, FERDI.
    6. Fischer, Sven & Guth, Werner & Kaplan, Todd & Zultan, Roi, 2014. "Auctions and Leaks: A Theoretical and Experimental Investigation," MPRA Paper 58940, University Library of Munich, Germany.
    7. Baumann, Florian & Denter, Philipp & Friehe, Tim, 2013. "Hide or show? Endogenous observability of private precautions against crime when property value is private information," DICE Discussion Papers 115, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    8. Denter, Philipp, 2020. "Campaign contests," European Economic Review, Elsevier, vol. 127(C).
    9. Konstantinos Protopappas, 2023. "Manipulation of moves in sequential contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(3), pages 511-535, October.
    10. Pau Balart & Sabine Flamand & Oliver Gürtler & Orestis Troumpounis, 2018. "Sequential choice of sharing rules in collective contests," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(5), pages 703-724, October.
    11. Friehe, Tim & Pham, Cat Lam & Miceli, Thomas J., 2018. "Law enforcement in a federal system: Endogenous timing of decentralized enforcement effort," International Review of Law and Economics, Elsevier, vol. 56(C), pages 134-141.
    12. Magnus Hoffmann & Grégoire Rota‐Graziosi, 2020. "Endogenous timing in the presence of non‐monotonicities," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(1), pages 359-402, February.
    13. Keisuke Hattori & Takahiro Kitamura, 2013. "Endogenous Timing in Strategic Environmental Policymaking," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(2), pages 199-215, June.
    14. Tomoya Nakamura, 2014. "One-Leader and Multiple-Follower Stackelberg Games with Private Information," ISER Discussion Paper 0908, Institute of Social and Economic Research, The University of Osaka.
    15. Kicsiny, R. & Varga, Z. & Scarelli, A., 2014. "Backward induction algorithm for a class of closed-loop Stackelberg games," European Journal of Operational Research, Elsevier, vol. 237(3), pages 1021-1036.
    16. Arturo García & Mariel Leal & Sang-Ho Lee, 2019. "Endogenous Timing with a Socially Responsible Firm," Korean Economic Review, Korean Economic Association, vol. 35, pages 345-370.
    17. Sven Fischer & Werner Güth & Todd R. Kaplan & Ro'i Zultan, 2021. "Auctions With Leaks About Early Bids: Analysis And Experimental Behavior," Economic Inquiry, Western Economic Association International, vol. 59(2), pages 722-739, April.
    18. Fischer, Sven & Guth, Werner & Kaplan, Todd & Zultan, Roi, 2014. "Auctions and Leaks: A Theoretical and Experimental Investigation," MPRA Paper 58940, University Library of Munich, Germany.
    19. Kyung Hwan Baik & Jong Hwa Lee, 2024. "Three‐player contests with a potential inactive player: Endogenous timing of effort exertion," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1335-1352, July.
    20. Hörtnagl, Tanja & Kerschbamer, Rudolf & Stracke, Rudi, 2019. "Competing for market shares: Does the order of moves matter even when it shouldn’t?," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 346-365.
    21. Blanca Moreno Dodson & Grégoire Rota-Graziosi & Clémence Vergne, 2012. "Breaking the wave of democracy: The effect of foreign aid on the incumbent's re-election probability," CERDI Working papers halshs-00722375, HAL.
    22. Grégoire ROTA-GRAZIOSI & Clémence VERGNE & Blanca MORENO DODSON, 2012. "Breaking the wave of democracy: The effect of foreign aid on the incumbent’s re-election probability," Working Papers 201231, CERDI.

    More about this item

    Keywords

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    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D30 - Microeconomics - - Distribution - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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