Two-Dimensional Effort in Patent-Race Games and Rent-Seeking Contests: The Case of Telephony

Joao Faria, Franklin Mixon, Steven B Caudill and Samantha J. Wineke
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Samantha J. Wineke: Department of Economics, Rhodes College, Memphis, TN 38112, USA

Games, 2014, vol. 5, issue 2, 1-11

Abstract: Using the political-economic history of the development of telephony during the 1870s as a backdrop, this paper studies a two-player Tullock contest that includes both research effort (R&D) and legal effort ( i.e. , rent-seeking effort). The two types of efforts complement each other and positively influence the payoff of the contest. We assume that legal effort affects the prize value, increasing the winner’s prospective rents, and research effort impacts the probability of winning the contest. The results of the model break new ground in showing that research effort is a function of legal effort, wherein research effort increases with rent-seeking effort. The model also shows the existence of a strategic equivalence between rent seeking and patent races.

Keywords: rent-seeking contests; patent-race games; simultaneous invention; telephony development (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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