Tullock's rent-seeking contest with a minimum expenditure requirement

L. Schoonbeek, P. Kooreman

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5 Citations (Scopus)

Abstract

We consider a rent-seeking contest of the kind introduced by Tullock (1980) in which two players compete for a monopoly rent. We extend the contest by requiring that if a player puts forward an effort, his expenditures must be larger than or equal to some minimum level. We show that, depending on the model parameters, the number of Nash equilibria of the extended model can be zero, one, two or four. Furthermore, it turns out that the extent of rent dissipation in a Nash equilibrium of the extended model can be larger than, equal to, or smaller than the extent of rent dissipation in the unique Nash equilibrium of the original model.

Original languageEnglish
Pages (from-to)477-486
Number of pages10
JournalPublic Choice
Volume93
Issue number3-4
DOIs
Publication statusPublished - Dec-1997

Keywords

  • DISSIPATION

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