IDEAS home Printed from https://ideas.repec.org/a/bpj/ajlecn/v15y2024i2p231-242n5.html
   My bibliography  Save this article

Second, But Not Last: Competition with Positive Spillovers

Author

Listed:
  • Guerra Alice

    (Department of Economics, University of Bologna, Piazza Scaravilli 2, 40126 Bologna, Italy)

  • Parisi Francesco

    (School of Law, University of Minnesota, Minneapolis, USA)

Abstract

This paper extends the traditional rent-seeking model to consider contests in which the effects of the contestants’ efforts are externally unproductive (i.e., redistributive) but internally productive (i.e., with positive spillover effects on other contestants). Our results show that when players act sequentially, the presence of positive spillovers on other contestants may reduce, or even reverse, the first-mover’s advantage. A second-mover advantage is very likely to arise. Notably, in contests with multiple players, the second-mover advantage does not unravel into a last-mover advantage. Players want to be second, but not last. The comparative statics analysis shows how the strength of positive spillovers affects contestants’ equilibrium expenditures and payoffs, and aggregate rent dissipation.

Suggested Citation

  • Guerra Alice & Parisi Francesco, 2024. "Second, But Not Last: Competition with Positive Spillovers," Asian Journal of Law and Economics, De Gruyter, vol. 15(2), pages 231-242, May.
  • Handle: RePEc:bpj:ajlecn:v:15:y:2024:i:2:p:231-242:n:5
    DOI: 10.1515/ajle-2023-0178
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/ajle-2023-0178
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.1515/ajle-2023-0178?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zizzo, Daniel John, 2002. "Racing with uncertainty: a patent race experiment," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 877-902, June.
    2. Reinganum, Jennifer F., 1985. "A two-stage model of research and development with endogenous second-mover advantages," International Journal of Industrial Organization, Elsevier, vol. 3(3), pages 275-292, September.
    3. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
    4. Lee, Sanghack & Hyeong Kang, J., 1998. "Collective contests with externalities," European Journal of Political Economy, Elsevier, vol. 14(4), pages 727-738, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sanghack Lee, 2001. "Two-Stage Contests With Additive Carryovers," International Economic Journal, Taylor & Francis Journals, vol. 17(1), pages 83-99.
    2. Zeynep B. Irfanoglu & Shakun D. Mago & Roman M. Sheremeta, 2014. "The New Hampshire Effect: Behavior in Sequential and Simultaneous Election Contests," Working Papers 14-15, Chapman University, Economic Science Institute.
    3. Ian A. MacKenzie, 2009. "Controlling externalities in the presence of rent seeking," CER-ETH Economics working paper series 09/111, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    4. repec:elg:eechap:15325_6 is not listed on IDEAS
    5. Alice Guerra & Barbara Luppi & Francesco Parisi, 2019. "Productive and unproductive competition: a unified framework," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(3), pages 785-804, October.
    6. Hinnosaar, Toomas, 2024. "Optimal sequential contests," Theoretical Economics, Econometric Society, vol. 19(1), January.
    7. Gil Epstein & Shmuel Nitzan, 2006. "The struggle over migration policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(4), pages 703-723, October.
    8. John Morgan & Felix Várdy, 2011. "On the buyability of voting bodies," Journal of Theoretical Politics, , vol. 23(2), pages 260-287, April.
    9. Hoffmann, Magnus & Kolmar, Martin, 2017. "Distributional preferences in probabilistic and share contests," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 120-139.
    10. Sung-Hoon Park, 2019. "The gap between equilibrium expected payoffs in contests with linear externalities," Economics Bulletin, AccessEcon, vol. 39(4), pages 2302-2307.
    11. Gil S Epstein, 2012. "Employer’s information and promotion-seeking activities," Economics and Business Letters, Oviedo University Press, vol. 1(4), pages 21-32.
    12. Gil S. Epstein & Ira N Gang, 2006. "Decentralizing Aid with Interested Parties," Departmental Working Papers 200629, Rutgers University, Department of Economics.
    13. Einy, E & Haimanko, O & Moreno, D & Sela, A & Shitovitz, B, 2013. "Tullock Contests with Asymmetric Information," Discussion Papers 2013-11, Graduate School of Economics, Hitotsubashi University.
    14. Dhritiman Gupta, 2020. "Prize sharing rules in collective contests: When does group size matter?," Discussion Papers 20-04, Indian Statistical Institute, Delhi.
    15. Todd Kaplan & David Wettstein, 2015. "The optimal design of rewards in contests," Review of Economic Design, Springer;Society for Economic Design, vol. 19(4), pages 327-339, December.
    16. Jia, Hao & Skaperdas, Stergios & Vaidya, Samarth, 2013. "Contest functions: Theoretical foundations and issues in estimation," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 211-222.
    17. Alex Krumer & Reut Megidish & Aner Sela, 2017. "Round‐Robin Tournaments with a Dominant Player," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(4), pages 1167-1200, October.
    18. Subhasish Chowdhury & Roman Sheremeta, 2011. "A generalized Tullock contest," Public Choice, Springer, vol. 147(3), pages 413-420, June.
    19. Hillman, Arye L. & Van Long, Ngo & Soubeyran, Antoine, 2001. "Protection, lobbying, and market structure," Journal of International Economics, Elsevier, vol. 54(2), pages 383-409, August.
    20. Deck, Cary & Sheremeta, Roman M., 2019. "The tug-of-war in the laboratory," European Journal of Political Economy, Elsevier, vol. 60(C).
    21. Roman Sheremeta, 2018. "Experimental Research on Contests," Working Papers 18-07, Chapman University, Economic Science Institute.

    More about this item

    Keywords

    competition; sequential rent seeking; spillover effects; second-mover advantage;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:ajlecn:v:15:y:2024:i:2:p:231-242:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.