Rent, risk, and replication: preference adaptation in winner-take-all markets
[Rente, Risiko und Replikation – Präferenz- Anpassung in „Der-Sieger-bekommt-alles“ Märkten]
We study the evolution of an economy where agents who are heterogeneous with respect to risk attitudes can either earn a certain income or enter a risky rent-seeking contest. We assume that agents behave rationally given their preferences, but that the population distribution of preferences evolves over time in response to material payoffs. We show that, in particular, initial distributions with full support converge to stationary states where all types may still be present, risk lovers specialize in rentseeking, and the available rents are perfectly dissipated.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 (0)30 25491-402
Fax: +49 (0)30 25491-400
Web page: http://www.wzb.eu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oechssler, Joerg & Frank Riedel, 1999.
"Evolutionary Dynamics on Infinite Strategy Spaces,"
Discussion Paper Serie A
606, University of Bonn, Germany.
- Oechssler, Jörg & Riedel, Frank, 1998. "Evolutionary dynamics on infinite strategy spaces," SFB 373 Discussion Papers 1998,68, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Joerg Oechssler & Frank Riedel, 1998. "Evolutionary Dynamics on Infinite Strategy Spaces," Game Theory and Information 9805002, EconWPA, revised 12 May 1998.
- W. Güth & S. Nitzan, 1997. "The Evolutionary Stability of Moral Objections to Free Riding," Economics and Politics, Wiley Blackwell, vol. 9(2), pages 133-149, 07.
- Rubin, Paul H & Paul, Chris W, II, 1979. "An Evolutionary Model of Taste for Risk," Economic Inquiry, Western Economic Association International, vol. 17(4), pages 585-96, October.
- Milgrom, Paul & Roberts, John, 1990. "The Efficiency of Equity in Organizational Decision Processes," American Economic Review, American Economic Association, vol. 80(2), pages 154-59, May.
- Boylan, Richard T., 1992. "Laws of large numbers for dynamical systems with randomly matched individuals," Journal of Economic Theory, Elsevier, vol. 57(2), pages 473-504, August.
- Dekel, E. & Scotchmer, S., 1999.
"On the Evolution of Attitudes Towards Risk in Winner-Take-All Games,"
4-99, Tel Aviv.
- Dekel, Eddie & Scotchmer, Suzanne, 1999. "On the Evolution of Attitudes towards Risk in Winner-Take-All Games," Journal of Economic Theory, Elsevier, vol. 87(1), pages 125-143, July.
- Paul R. Milgrom., 1987.
"Employment Contracts, Influence Activities and Efficient Organization Design,"
Economics Working Papers
8741, University of California at Berkeley.
- Milgrom, Paul R, 1988. "Employment Contracts, Influence Activities, and Efficient Organization Design," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 42-60, February.
- Milgrom, Paul R., 1987. "employment contracts, influence activities and efficient organization design," Department of Economics, Working Paper Series qt6pf6c5j6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Bester, Helmut & Guth, Werner, 1998.
"Is altruism evolutionarily stable?,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 34(2), pages 193-209, February.
- Rogers, Alan R, 1994. "Evolution of Time Preference by Natural Selection," American Economic Review, American Economic Association, vol. 84(3), pages 460-81, June.
- George J. Mailath, 1998.
"Do People Play Nash Equilibrium? Lessons from Evolutionary Game Theory,"
Journal of Economic Literature,
American Economic Association, vol. 36(3), pages 1347-1374, September.
- George J. Mailath, . ""Do People Play Nash Equilibrium? Lessons From Evolutionary Game Theory''," CARESS Working Papres 98-01, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Boylan, Richard T., 1990. "Laws of Large Numbers for Dynamical Systems with Randomly Matched Individuals," Working Papers 748, California Institute of Technology, Division of the Humanities and Social Sciences.
- Robson, Arthur J., 1996. "The Evolution of Attitudes to Risk: Lottery Tickets and Relative Wealth," Games and Economic Behavior, Elsevier, vol. 14(2), pages 190-207, June.
- Waldman, Michael, 1994. "Systematic Errors and the Theory of Natural Selection," American Economic Review, American Economic Association, vol. 84(3), pages 482-97, June.
- Ted To, 1995.
"Risk and Evolution,"
- Robson, Arthur J., 1996. "A Biological Basis for Expected and Non-expected Utility," Journal of Economic Theory, Elsevier, vol. 68(2), pages 397-424, February.
- George J. Mailath, 1998. "Corrigenda [Do People Play Nash Equilibrium? Lessons from Evolutionary Game Theory]," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1941-1941, December.
- Judd, Kenneth L., 1985. "The law of large numbers with a continuum of IID random variables," Journal of Economic Theory, Elsevier, vol. 35(1), pages 19-25, February.
- Karni, Edi & Schmeidler, David, 1986. "Self-preservation as a foundation of rational behavior under risk," Journal of Economic Behavior & Organization, Elsevier, vol. 7(1), pages 71-81, March.
When requesting a correction, please mention this item's handle: RePEc:zbw:wzbmpg:fsiv0110. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.