Sharing rules in rent-seeking contests with third-party intervention

Friedhelm Hentschel ()
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Friedhelm Hentschel: University of St. Gallen

Economics of Governance, 2024, vol. 25, issue 3, No 4, 414 pages

Abstract: Abstract This paper presents and solves a model of third-party intervention in rent-seeking contests. Two players are engaged in a rent-seeking contest, while each of the two players can be supported by a third party. In return, the third party receives a share of the prize if the supported player wins. I use this model to discuss how equilibrium behavior depends on the sharing rule between the third party and the supported player. Among others, I find that a third party may have an incentive to increase support despite a reduction of his share of the prize.

Keywords: Contest; Rent-seeking; Third-party intervention (search for similar items in EconPapers)
JEL-codes: D74 F51 H41 H56 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10101-024-00317-9

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