Public Choice

, Volume 145, Issue 3, pp 339–349

Risk-aversion and prudence in rent-seeking games

Article

DOI: 10.1007/s11127-009-9569-x

Cite this article as:
Treich, N. Public Choice (2010) 145: 339. doi:10.1007/s11127-009-9569-x

Abstract

This paper considers a common n-agent symmetric rent-seeking game. It derives conditions so that risk-aversion and risk always decrease rent-seeking efforts. These conditions hold for any regular contest success function when risk-averse rent-seekers are also prudent. Under n=2, prudence is a necessary and sufficient condition for risk-aversion to decrease rent-seeking efforts compared to risk-neutrality. An intuition for this result is given based on a self-protection model.

Risk-aversion Rent-seeking Lobbying Uncertainty Prudence Self-protection 

JEL Classification

C72 D72 D81 

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Toulouse School of Economics (LERNA-INRA)ToulouseFrance

Personalised recommendations