Rent seeking and rent dissipation: A neutrality result |
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Authors: | José Alcalde Matthias Dahm |
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Institution: | 1. IUDESP and Dep. of Economics, University of Alicante, Ctra. San Vicente s/n, E-03071, Alicante, Spain;2. Dep. of Economics University Rovira i Virgili of Tarragona Av. de la Universitat, 1 43204 Reus (Tarragona), Spain |
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Abstract: | We consider rent seeking contests between at least two agents who might value the prize differently. We capture a wide range of institutional aspects of contests by analyzing a class of contest success functions fulfilling several properties. The main properties are anonymity and a condition on the elasticity of a rent seeker's win probability with respect to her effort. We show the existence of a mixed-strategy equilibrium and establish equilibrium payoffs. In this equilibrium complete rent dissipation holds. Our results imply a partial robustness result for the all-pay auction. |
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