Privately Informed Seekers of an Uncertain Rent

Ronald Harstad

Public Choice, 1995, vol. 83, issue 1-2, 93 pages

Abstract: Two departures from antecedent rent-seeking models are invoked: a rent of unknown size is sought, and rent seekers obtain private imperfect estimates of this size. A symmetric equilibrium for a fixed number of rent seekers is characterized, and shown to underdissipate the rent. Then a model of the decision to obtain private information and participate in the rent-seeking contest is built. The symmetric equilibrium participation probability equates expected profit to participation costs. A simple formula for underdissipation results: dissipation is incomplete precisely by the expected aggregate participation costs. If an award mechanism can attain a lower level of dissipation for a fixed number of seekers, then it will raise the endogenous probability of participation, and as a result will dissipate less rent in the equilibrium with an endogenous number of seekers. Copyright 1995 by Kluwer Academic Publishers

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (15)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:83:y:1995:i:1-2:p:81-93

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().