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The strategic advantage of interdependent preferences in rent-seeking contests

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  • T. Guse
  • B. Hehenkamp

Abstract

We study rent-seeking contests, where the set of players contains two groups of players – one with independent preferences and the other with (negatively) interdependent preferences. It turns out that the latter experience a strategic advantage in general two-player contests and in n-player-contests with non-increasing marginal efficiency. For general n-player contests with increasing marginal efficiency, the strategic advantage prevails provIDed convexity of contest technologies is sufficiently weak. For strongly convex contest technologies, other types of equilibria exist, including one where indivIDualists receive strictly higher pay-off. Copyright Springer Science + Business Media B.V. 2006

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  • T. Guse & B. Hehenkamp, 2006. "The strategic advantage of interdependent preferences in rent-seeking contests," Public Choice, Springer, vol. 129(3), pages 323-352, December.
    • Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:323-352
    DOI: 10.1007/s11127-006-9033-0
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    Cited by:

    1. Hörtnagl, Tanja & Kerschbamer, Rudolf & Stracke, Rudi, 2019. "Competing for market shares: Does the order of moves matter even when it shouldn’t?," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 346-365.
    2. Rusche, Christian, 2011. "Does Delegation Help to Prevent Spiteful Behavior?," Ruhr Economic Papers 270, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Stracke, Rudi & Hörtnagl, Tanja & Kerschbamer, Rudolf, 2016. "Competing for Market Shares: Why the Order of Moves Matters Even When It Shouldn't," VfS Annual Conference 2016 (Augsburg): Demographic Change 145532, Verein für Socialpolitik / German Economic Association.
    4. Kim, Jeong-Yoo & Lee, Kyu-Min & Park, Sung-Hoon, 2022. "Evolution of revealing emotions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 597(C).
    5. Gu, Yiquan & Hehenkamp, Burkhard & Leininger, Wolfgang, 2017. "The Dark Side of the Force: Evolutionary Equilibrium in Contests with Stochastic Entry," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168168, Verein für Socialpolitik / German Economic Association.
    6. Sina Risse, 2011. "Two-stage group rent-seeking with negatively interdependent preferences," Public Choice, Springer, vol. 147(3), pages 259-276, June.
    7. Wolfgang Leininger, 2008. "Evolutionarily Stable Preferences in Contests," Ruhr Economic Papers 0049, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Sung-Hoon Park & Jeong-Yoo Kim, 2022. "Evolutionary stability of preferences: altruism, selfishness, and envy," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(2), pages 349-363, February.
    9. Frederik Schmidt, 2009. "Evolutionary stability of altruism and envy in Tullock contests," Economics of Governance, Springer, vol. 10(3), pages 247-259, July.
    10. Christian Rusche, 2011. "Does Delegation Help to Prevent Spiteful Behavior?," Ruhr Economic Papers 0270, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    11. repec:zbw:rwirep:0049 is not listed on IDEAS
    12. Wolfgang Leininger, 2008. "Evolutionarily Stable Preferences in Contests," CESifo Working Paper Series 2343, CESifo.
    13. Eyal Baharad & Shmuel Nitzan, 2008. "Contest Efforts in Light of Behavioural Considerations," Economic Journal, Royal Economic Society, vol. 118(533), pages 2047-2059, November.
    14. Joachim Heinzel, 2019. "Credence Goods Markets with Heterogeneous Experts," Working Papers CIE 118, Paderborn University, CIE Center for International Economics.
    15. Leininger, Wolfgang, 2008. "Evolutionarily Stable Preferences in Contests," Ruhr Economic Papers 49, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Eyal Baharad & Shmuel Nitzan, 2008. "Contest Efforts in Light of Behavioural Considerations," Economic Journal, Royal Economic Society, vol. 118(533), pages 2047-2059, November.
    17. repec:zbw:rwirep:0270 is not listed on IDEAS

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