Rent, Risk and Replication. Political Contests and Preference Adaptation

Karl Wärneryd

No 77, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: We study the long-run behavior of an economy where agents who are heterogeneous with respect to risk attitudes can either earn a certain income or enter a risky rent seeking contest. In contrast with standard evolutionary game theory, we distinguish between utility and material payoffs, and allow the population distribution of preferences to evolve over time in response to material payoffs. We show that, in particular, initial distributions with full support converge to stationary states where all types may still be present, risk lovers specialize in rent seeking, and the available rents are perfectly dissipated.

Keywords: Risk attitudes; rent seeking; evolution (search for similar items in EconPapers)
JEL-codes: C72 D72 D80 (search for similar items in EconPapers)
Pages: 27 pages
Date: 1995-10
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Published in Games and Economic Behavior, 2002, pages 344-364.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0077

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