Rent-seeking group contests with one-sided private information

R.J. Everhardt, Lambert Schoonbeek

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Abstract

We consider a rent-seeking contest where players compete in groups for a prize of given value. One group has private information about its number of members, which can be either small or large. The other groups have possibly different but publicly known sizes. We present an explicit characterization of the groups which are active in the unique equilibrium of the game, and relate the relative magnitude of group efforts to the size of the groups. We compare the decision of each type of the privately informed group to be active in equilibrium to the corresponding decision in a benchmark game with complete information.

Original languageEnglish
Pages (from-to)55-73
Number of pages19
JournalDecisions in Economics and Finance
Volume38
Issue number1
DOIs
Publication statusPublished - Apr-2015

Keywords

  • Rent seeking
  • Group contest
  • Private information
  • Group-size paradox

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