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Sharing rules in rent-seeking contests with third-party intervention

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  • Friedhelm Hentschel

    (University of St. Gallen)

Abstract

This paper presents and solves a model of third-party intervention in rent-seeking contests. Two players are engaged in a rent-seeking contest, while each of the two players can be supported by a third party. In return, the third party receives a share of the prize if the supported player wins. I use this model to discuss how equilibrium behavior depends on the sharing rule between the third party and the supported player. Among others, I find that a third party may have an incentive to increase support despite a reduction of his share of the prize.

Suggested Citation

  • Friedhelm Hentschel, 2024. "Sharing rules in rent-seeking contests with third-party intervention," Economics of Governance, Springer, vol. 25(3), pages 401-414, September.
    • Handle: RePEc:spr:ecogov:v:25:y:2024:i:3:d:10.1007_s10101-024-00317-9
    DOI: 10.1007/s10101-024-00317-9
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    References listed on IDEAS

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    1. Lee, Sanghack, 1995. "Endogenous Sharing Rules in Collective-Group Rent-Seeking," Public Choice, Springer, vol. 85(1-2), pages 31-44, October.
    2. Shmuel Nitzan, 2008. "Collective Rent Dissipation," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 309-321, Springer.
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    More about this item

    Keywords

    Contest; Rent-seeking; Third-party intervention;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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