Risk-Aversion and Prudence in Rent-Seeking Games

Nicolas Treich

No 09-013, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: This paper considers a common n-agent symmetric rent-seeking game. It derives conditions so that risk-aversion and risk always decrease rent-seeking efforts. These conditions hold for any regular contest success function when risk-averse rent-seekers are also prudent. Under n = 2, prudence is a necessary and sufficient condition for risk-aversion to decrease rent-seeking efforts compared to risk-neutrality. An intuition for this result is given based on a self-protection model.

Keywords: risk-aversion; rent-seeking; lobbying; uncertainty (search for similar items in EconPapers)
JEL-codes: C72 D72 D81 (search for similar items in EconPapers)
Date: 2009-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Risk-aversion and prudence in rent-seeking games (2010)
Working Paper: Risk-aversion and Prudence in Rent-seeking Games (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:22139

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