Public Choice

, Volume 99, Issue 3–4, pp 439–454 | Cite as

The incidence of overdissipation in rent-seeking contests

  • Michael R. Baye
  • Dan Kovenock
  • Casper G. de Vries


Tullock's analysis of rent seeking and overdissipation is reconsidered. We show that, while equilibrium strategies do not permit overdissipation in expectation, for particular realizations of players' mixed strategies the total amount spent competing for rents can exceed the value of the prize. We also show that the cross-sectional incidence of overdissipation in the perfectly discriminating contest ranges from 0.50 to 0.44 as the number of players increases from two to infinity. Thus, even though the original analysis of overdissipation is flawed, there are instances in which rent-seekers spend more than the prize is worth.


Public Finance Mixed Strategy Equilibrium Strategy Original Analysis Rent Seek 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Kluwer Academic Publishers 1999

Authors and Affiliations

  • Michael R. Baye
    • 1
  • Dan Kovenock
    • 2
  • Casper G. de Vries
    • 3
  1. 1.Department of Business Economics and Public PolicyIndiana University, School of BusinessBloomingtonU.S.A
  2. 2.Purdue University and Tinbergen InstituteThe Netherlands
  3. 3.Erasmus Universiteit Rotterdam and Tinbergen InstituteThe Netherlands

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