Sorting in Iterated Incumbency Contests

Georg Nöldeke and Samuel Häfner

VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes incumbency contests in a large population setting. Incumbents repeatedly face different challengers, holding on to their positions until defeated in a contest. Defeated incumbents turn into challengers until they win a contest against an incumbent, thereby regaining an incumbency position. Individuals are heterogeneous as regards their payoffs from being incumbent. We consider steady-state equilibria and study how and to which extent individuals sort into the incumbency positions depending on their type. In particular, we identify sufficient conditions for positive sorting, meaning that types with higher incumbency payoffs are overrepresented among the incumbents, and show that negative rather than positive sorting may also arise in equilibrium when these conditions are violated. Further results show how incumbency rents, surplus, and sorting are affected by the frequency at which incumbency is contested.

Keywords: Contests; Sorting; Incumbency Rents; Steady-State Equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D72 D74 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-gth, nep-mic and nep-pol
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https://www.econstor.eu/bitstream/10419/181512/1/VfS-2018-pid-12000.pdf (application/pdf)

Related works:
Journal Article: Sorting in iterated incumbency contests (2022)
Working Paper: Sorting in Iterated Incumbency Contests (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc18:181512

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