Advertisement

Tullock’s rent-seeking contest with a minimum expenditure requirement

  • L. Schoonbeek
  • P. Kooreman

Abstract

We consider a rent-seeking contest of the kind introduced by Tullock (1980) in which two players compete for a monopoly rent. We extend the contest by requiring that if a player puts forward an effort, his expenditures must be larger than or equal to some minimum level. We show that, depending on the model parameters, the number of Nash equilibria of the extended model can be zero, one, two or four. Furthermore, it turns out that the extent of rent dissipation in a Nash equilibrium of the extended model can be larger than, equal to, or smaller than the extent of rent dissipation in the unique Nash equilibrium of the original model.

Keywords

Nash Equilibrium Total Expenditure Extended Model Benchmark Case Reaction Curve 
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.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • L. Schoonbeek
    • 1
  • P. Kooreman
    • 1
  1. 1.Faculty of EconomicsUniversity of GroningenGroningenThe Netherlands

Personalised recommendations