Public Choice

, Volume 139, Issue 3–4, pp 335–342 | Cite as

The uniqueness of pure-strategy Nash equilibrium in rent-seeking games with risk-averse players

Article

Abstract

This article proves that if each player’s measure of absolute risk aversion is nonincreasing in his/her wealth, then there exists a unique pure-strategy Nash equilibrium in the general rent-seeking game, where risk-averse players can coexist with risk-neutral players, attitude toward risk can differ among players, and concave production functions for lotteries are not necessarily the same among players.

Keywords

Rent-seeking Nonincreasing absolute risk aversion Uniqueness 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Arrow, K. (1970). Essays in the theory of risk-bearing. Markham. Google Scholar
  2. Che, Y.-K., & Gale, I. (1997). Rent dissipation when rent seekers are budget constrained. Public Choice, 92, 109–126. doi:10.1023/A:1017937708549. CrossRefGoogle Scholar
  3. Cornes, R., & Hartley, R. (2003). Risk aversion, heterogeneity and contests. Public Choice, 117, 1–25. doi:10.1023/A:1026136008608. CrossRefGoogle Scholar
  4. Hillman, A., & Katz, E. (1984). Risk-averse rent seekers and the social cost of monopoly power. The Economic Journal, 94, 104–110. doi:10.2307/2232219. CrossRefGoogle Scholar
  5. Konrad, K., & Schlesinger, H. (1997). Risk aversion in rent-seeking and rent-augmenting games. The Economic Journal, 107, 1671–1683. doi:10.1111/1468-0297.00249. CrossRefGoogle Scholar
  6. Long, N., & Vousden, N. (1987). Risk-averse rent seeking with shared rents. The Economic Journal, 97, 971–985. doi:10.2307/2233083. CrossRefGoogle Scholar
  7. Perez-Castrillo, J. D., & Verdier, T. (1992). A general analysis of rent-seeking games. Public Choice, 73, 335–350. doi:10.1007/BF00140926. CrossRefGoogle Scholar
  8. Skaperdas, S., & Gan, L. (1995). Risk aversion in contests. The Economic Journal, 105, 951–962. doi:10.2307/2235161. CrossRefGoogle Scholar
  9. Szidarovszky, F., & Okuguchi, K. (1997). On the existence and uniqueness of pure Nash equilibrium in rent-seeking games. Games and Economic Behavior, 18, 135–140. doi:10.1006/game.1997.0517. CrossRefGoogle Scholar
  10. Tullock, G. (1980). Efficient rent-seeking. In J. M. Buchanan, R. D. Tollison, & G. Tullock (Eds.), Toward a theory of the rent-seeking society (pp. 97–112). College Station: Texas A & M Press. Google Scholar
  11. Vives, X. (1999). Oligopoly pricing, old ideas and new tools. Cambridge: MIT Press. Google Scholar
  12. Yamazaki, T. (2008). On the existence and uniqueness of pure-strategy Nash equilibrium in asymmetric rent-seeking contests. Journal of Public Economic Theory, 10, 317–327. doi:10.1111/j.1467-9779.2008.00364.x. CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Department of EconomicsNiigata UniversityNiigata-shiJapan

Personalised recommendations