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Economic Theory Bulletin

, Volume 5, Issue 2, pp 151–164 | Cite as

Risky rents

  • Jean-Daniel Guigou
  • Bruno LovatEmail author
  • Nicolas Treich
Research Article

Abstract

We consider a strategic contest game in which risk-averse agents exert efforts to increase their share of a risky rent. We show that a unique symmetric equilibrium always exists under constant or decreasing absolute risk aversion. We also show that agents exert in general less efforts when they are more risk averse or when the rent is more risky.

Keywords

Contest Rent seeking Risk Risk aversion Shared rents 

JEL Classification

C72 D72 D81 

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Copyright information

© Society for the Advancement of Economic Theory 2016

Authors and Affiliations

  • Jean-Daniel Guigou
    • 1
  • Bruno Lovat
    • 2
    Email author
  • Nicolas Treich
    • 3
  1. 1.University of Luxembourg (LSF)Luxembourg CityLuxembourg
  2. 2.Université de Lorraine (BETA-CNRS)NancyFrance
  3. 3.Toulouse School of Economics, INRAUniversity Toulouse CapitoleToulouseFrance

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