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Reimbursement as a tool to reduce sabotaging in rent‐seeking contests

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  • Yizhaq Minchuk

Abstract

We study standard rent‐seeking contests with reimbursement and sabotaging. This study is conducted for a symmetric model with complete information. We show that changing the contest mechanism by applying a form of reimbursement could be an effective tool against sabotaging, in addition to the fact that it increases contest designer revenue. Simple changes such as sufficient reimbursement to winners/losers might completely stop sabotaging efforts in the contest.

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  • Yizhaq Minchuk, 2021. "Reimbursement as a tool to reduce sabotaging in rent‐seeking contests," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 235-238, January.
    • Handle: RePEc:wly:mgtdec:v:42:y:2021:i:1:p:235-238
    DOI: 10.1002/mde.3228
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    References listed on IDEAS

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    1. Yizhaq Minchuk & Aner Sela, 2020. "Contests with insurance," Review of Economic Design, Springer;Society for Economic Design, vol. 24(1), pages 1-22, June.
    2. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    3. Alexander Matros & Daniel Armanios, 2009. "Tullock’s contest with reimbursements," Public Choice, Springer, vol. 141(1), pages 49-63, October.
    4. Andrew Yates, 2011. "Winner-pay contests," Public Choice, Springer, vol. 147(1), pages 93-106, April.
    5. repec:elg:eechap:15325_9 is not listed on IDEAS
    6. Cohen, Chen & Sela, Aner, 2005. "Manipulations in contests," Economics Letters, Elsevier, vol. 86(1), pages 135-139, January.
    7. Yizhaq Minchuk & Baruch Keren & Yossi Hadad, 2018. "Sabotaging in contests with monitoring efforts," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 39(6), pages 674-681, September.
    8. Roger D. Congleton & Arye L. Hillman (ed.), 2015. "Companion to the Political Economy of Rent Seeking," Books, Edward Elgar Publishing, number 15325.
    9. Yizhaq Minchuk, 2020. "Rent-seeking contest with two forms of sabotaging efforts," Economics Bulletin, AccessEcon, vol. 40(2), pages 1413-1419.
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    Cited by:

    1. Yizhaq Minchuk, 2022. "Winner‐pay contests with a no‐winner possibility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1874-1879, September.
    2. Kjell Hausken, 2021. "Axiomatizing additive multi-effort contests," SN Business & Economics, Springer, vol. 1(11), pages 1-12, November.

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