Rent-seeking contests with independent private values

Christian Ewerhart

No 490, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: We consider symmetric rent-seeking contests with independent private valuations of the contest prize. For a two-parameter specification with continuous types, we fully characterize the Bayesian equilibrium, and study its basic properties. The willingness to waste is a hump-shaped function of the private valuation, with the median type expending the highest share of her valuation. A first-order (second-order) stochastic increase in the common type distribution raises (lowers) ex-ante expected efforts. However, neither first order nor second-order stochastic dominance in valuations necessarily leads to a first-order stochastic dominance ranking in efforts. We also show that, as uncertainty vanishes, the Bayesian equilibrium converges to the Nash equilibrium of the model with complete information.

Keywords: Rent seeking; conflict; independent private valuations; first-order stochastic dominance; mean-preserving spread. (search for similar items in EconPapers)
JEL-codes: C72 H41 (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-cta and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:490

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