Abstract
We analyze a contest between two groups where group members have differing valuations for the contested rent. Generically the pivotal group member with the median valuation of the rent will not act himself but will want to send a group member that has preferences different to her own into the contest. The delegation can be either to more or less “radical” group members. The direction of delegation depends on the order of moves and the relative “aggressiveness” of the group medians. We show that almost certainly very asymmetric equilibria arise, even if the median group members value the rent (almost) equally. Delegation can lead to a social improvement in terms of resources spent in the contest.
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We are indebted to Tobias Boehm, Nicolas Klein, Kai Konrad, Dan Kovenock, Matthias Messner, Johannes Muenster, Ray Rees, Hans Zenger and seminar participants at the 2005 Meeting of the Public Choice Society, the European Public Choice Society, the Royal Economic Society, the WZB Berlin, and the Universities of Guelph and Munich for their comments and suggestions. The editor, Massimo Morelli, and an anonymous referee helped to substantially improve the paper.
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Brandauer, S., Englmaier, F. A model of strategic delegation in contests between groups. Rev Econ Design 13, 205–232 (2009). https://doi.org/10.1007/s10058-008-0058-3
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DOI: https://doi.org/10.1007/s10058-008-0058-3