Rentseeking By Players With Constant Absolute Risk Aversion
We introduce a novel method of modelling Tullock rent-seeking contests that avoids the complexities encountered by the ‘best response function’ approach. We analyse contests in which there are many risk averse players differing in their attitudes to risk. We establish that, if every player has a constant degree of absolute risk aversion, a unique equilibrium exists. We also establish comparative static results and examine how the level of rent dissipation is affected by the heterogeneity of attitudes towards risk and the precise nature of the technology.
|Date of creation:||2000|
|Date of revision:||Jan 2001|
|Publication status:||Published in Public Choice, 2003, Vol. 117, pages 1-25.|
|Contact details of provider:|| Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom|
Phone: +44 (0)1782 584581
Fax: +44 (0)1782 717577
Web page: http://www.keele.ac.uk/depts/ec/cer/
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|Order Information:|| Postal: Department of Economics, Keele University, Keele, Staffordshire ST5 5BG - United Kingdom|
Web: http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm Email:
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