Privately Informed Seekers of an Uncertain Rent.

B-Tier
Journal: Public Choice
Year: 1995
Volume: 83
Issue: 1-2
Pages: 81-93

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Two departures from antecedent rent-seeking models are invoked: a rent of unknown size is sought, and rent seekers obtain private imperfect estimates of this size. A symmetric equilibrium for a fixed number of rent seekers is characterized, and shown to underdissipate the rent. Then a model of the decision to obtain private information and participate in the rent-seeking contest is built. The symmetric equilibrium participation probability equates expected profit to participation costs. A simple formula for underdissipation results: dissipation is incomplete precisely by the expected aggregate participation costs. If an award mechanism can attain a lower level of dissipation for a fixed number of seekers, then it will raise the endogenous probability of participation, and as a result will dissipate less rent in the equilibrium with an endogenous number of seekers. Copyright 1995 by Kluwer Academic Publishers

Technical Details

RePEc Handle
repec:kap:pubcho:v:83:y:1995:i:1-2:p:81-93
Journal Field
Public
Author Count
1
Added to Database
2026-01-25