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Rent-seeking for a public good with additive contributions

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  • Iryna Topolyan

Abstract

We analyze rent-seeking for a public good with two groups, where the provision of a public good is decided in the all-pay contest where “the winner takes all”. We assume that the valuation of the public good varies across groups, but is the same for all members within a group. Free-riding in such situation was predicted by Baik et al. (J Public Econ 82(3):415–429, 2001 ). We describe a continuum of equilibria where all players make contributions. There is room for substantial payoff asymmetry, which ranges from equal payoffs to all group members to a zero payoff for the player who makes a contribution and positive payoffs for free-riders. The results generalize for the case where the prize has both a private and a public component. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • Iryna Topolyan, 2014. "Rent-seeking for a public good with additive contributions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(2), pages 465-476, February.
    • Handle: RePEc:spr:sochwe:v:42:y:2014:i:2:p:465-476
    DOI: 10.1007/s00355-013-0741-3
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    References listed on IDEAS

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    4. Kyung Baik, 2008. "Contests with group-specific public-good prizes," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(1), pages 103-117, January.
    5. Katz, Eliakim & Nitzan, Shmuel & Rosenberg, Jacob, 1990. "Rent-Seeking for Pure Public Goods," Public Choice, Springer, vol. 65(1), pages 49-60, April.
    6. Joan Esteban & Debraj Ray, 2008. "Collective Action and the Group Size Paradox," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 379-388, Springer.
    7. Baik, Kyung Hwan & Kim, In-Gyu & Na, Sunghyun, 2001. "Bidding for a group-specific public-good prize," Journal of Public Economics, Elsevier, vol. 82(3), pages 415-429, December.
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    Cited by:

    1. Katsuya Kobayashi, 2019. "Step-by-step group contests with group-specific public-good prizes," Economics of Governance, Springer, vol. 20(2), pages 183-204, June.
    2. Arye Hillman & Ngo Van Long, 2017. "The social cost of contestable benefits," CIRANO Working Papers 2017s-11, CIRANO.
    3. Brookins, Philip & Lightle, John P. & Ryvkin, Dmitry, 2015. "Optimal sorting in group contests with complementarities," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 311-323.
    4. Arye L. Hillman & Ngo Van Long, 2017. "Rent Seeking: The Social Cost of Contestable Benefits," CESifo Working Paper Series 6462, CESifo.
    5. Dan Kovenock & Brian Roberson, 2018. "The Optimal Defense Of Networks Of Targets," Economic Inquiry, Western Economic Association International, vol. 56(4), pages 2195-2211, October.
    6. Stefano Barbieri & David Malueg & Iryna Topolyan, 2014. "The best-shot all-pay (group) auction with complete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(3), pages 603-640, November.
    7. Baik, Kyung Hwan & Jung, Hanjoon Michael, 2021. "Contests with multiple alternative prizes: Public-good/bad prizes and externalities," Journal of Mathematical Economics, Elsevier, vol. 92(C), pages 103-116.
    8. Christian Ewerhart, 2022. "A “fractal” solution to the chopstick auction," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(4), pages 1025-1041, November.
    9. Feng, Xin & Jiao, Qian & Kuang, Zhonghong & Lu, Jingfeng, 2024. "Optimal prize design in team contests with pairwise battles," Journal of Economic Theory, Elsevier, vol. 215(C).
    10. Dongryul Lee & Joon Song, 2019. "Optimal Team Contests to Induce More Efforts," Journal of Sports Economics, , vol. 20(3), pages 448-476, April.
    11. Cardona, Daniel & Rubí-Barceló, Antoni, 2016. "Group-contests with endogenous claims," European Journal of Political Economy, Elsevier, vol. 44(C), pages 97-111.
    12. Subhasish M. Chowdhury & Iryna Topolyan, 2016. "Best-shot versus weakest-link in political lobbying: an application of group all-pay auction," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 959-971, December.
    13. Barbieri, Stefano & Kovenock, Dan & Malueg, David A. & Topolyan, Iryna, 2019. "Group contests with private information and the “Weakest Link”," Games and Economic Behavior, Elsevier, vol. 118(C), pages 382-411.
    14. Subhasish M. Chowdhury & Iryna Topolyan, 2015. "The Group All-Pay Auction with Heterogeneous Impact Functions," University of East Anglia Applied and Financial Economics Working Paper Series 069, School of Economics, University of East Anglia, Norwich, UK..
    15. Mercier, Jean-François, 2018. "Non-deterministic group contest with private information," Mathematical Social Sciences, Elsevier, vol. 95(C), pages 47-53.
    16. Christian Ewerhart & Marco Serena, 2023. "On the (Im-)Possibility of Representing Probability Distributions as a Difference of I.I.D. Noise Terms," Working Papers tax-mpg-rps-2023-04, Max Planck Institute for Tax Law and Public Finance.
    17. Brookins, Philip & Jindapon, Paan, 2021. "Risk preference heterogeneity in group contests," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    18. Subhasish M. Chowdhury & Dongryul Lee & Iryna Topolyan, 2016. "The Max‐Min Group Contest: Weakest‐link (Group) All‐Pay Auction," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 105-125, July.
    19. Vázquez-Sedano Alexis, 2018. "Sharing the Effort Costs in Group Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 18(1), pages 1-21, January.

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