Abstract
Government intervention often gives rise to contests and the government can influence their outcome by choosing their type. We consider a contest with two interest groups: one that is governed by a central planner and one that is not. Rent dissipation is compared under two well-known contest success functions: the generalized logit and the all-pay auction. We also consider the case in which the government can limit the size of the non-governed interest group in order to determine the scope of rent dissipation, with the goal of either increasing the rent obtained by the government or reducing the wasted resources invested in the contest.
Original language | English |
---|---|
Pages (from-to) | 133-149 |
Number of pages | 17 |
Journal | Theory and Decision |
Volume | 79 |
Issue number | 1 |
Early online date | 26 Jun 2014 |
DOIs | |
State | Published - 25 Jul 2015 |
Bibliographical note
Publisher Copyright:© 2014, Springer Science+Business Media New York.
Funding
Financial support from the Adar Foundation of the Department of Economics of Bar-Ilan University is gratefully acknowledged. We are grateful to the referees for their constructive comments
Funders | Funder number |
---|---|
Adar Foundation of the Department of Economics of Bar-Ilan University |
Keywords
- All-pay auction
- Central planner
- Contest
- Generalized logit contest success function
- Rent dissipation