Rent dissipation in large population Tullock contests

Ratul Lahkar () and Rezina Sultana ()
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Ratul Lahkar: Ashoka University
Rezina Sultana: Indian Institute of Management Udaipur

Public Choice, 2023, vol. 197, issue 1, No 9, 253-282

Abstract: Abstract Tullock contests model rent seeking behavior where agents exert unproductive effort to probabilistically win a fixed prize. Rent dissipation measures the social loss involved in effort exertion in such contests. Tullock contests are characterized by an impact function, which measures how effort impacts success, and a cost of effort function. If these functions are asymmetric and non-linear, then the contest cannot be solved in closed form. Hence, we approximate such contests with a large population contest, for which Nash equilibria and rent dissipation can be explicitly calculated. Rent dissipation is then the ratio of the effort elasticity of impact to the effort elasticity of cost. Greater elasticity of impact incentivizes more exertion of unproductive effort generating higher social loss.

Keywords: Tullock contests; Rent dissipation; Large population games (search for similar items in EconPapers)
JEL-codes: C72 D72 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11127-023-01103-7

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