Risk lovers and the rent over-investment puzzle

B-Tier
Journal: Public Choice
Year: 2015
Volume: 164
Issue: 1
Pages: 87-101

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

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

Abstract

In this paper, we prove existence and uniqueness of equilibrium in a rent-seeking contest given a class of heterogeneous risk-loving players. We explore the role third-order risk attitude plays in equilibrium and find that imprudence is sufficient for risk lovers to increase rent-seeking investment above the risk-neutral outcome. Moreover, we show that rent can be fully dissipated in a standard Tullock contest played by a large number of risk-lovers. Copyright Springer Science+Business Media New York 2015

Technical Details

RePEc Handle
repec:kap:pubcho:v:164:y:2015:i:1:p:87-101
Journal Field
Public
Author Count
2
Added to Database
2026-01-25