The Solution to the Tullock Rent-Seeking Game When R > 2: Mixed-Strategy Equilibria and Mean Dissipation Rates

In Tullock's rent-seeking model, the probability a player wins the game depends on expenditures raised to the power R. We show that a symmetric mixed-strategy Nash equilibrium exists when R > 2, and that overdissipation of rents does not arise in any Nash equilibrium. We derive a tight lower...

Full description

Saved in:
Bibliographic Details
Published in:Public choice 1994-12, Vol.81 (3/4), p.363-380
Main Authors: Baye, Michael R., Kovenock, Dan, de Vries, Casper G.
Format: Article
Language:English
Subjects:
Auctions
Bids
Campaign literature
Competition
Economic models
Economic Policy
Economic rent
Equilibrium
Expenditures
Experimental results
Game Theory
Hypotheses
Mixed strategy
Nash equilibrium
Null hypothesis
Political economy
Politics
Rent seeking behavior
Rent-seeking
Strategy
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In Tullock's rent-seeking model, the probability a player wins the game depends on expenditures raised to the power R. We show that a symmetric mixed-strategy Nash equilibrium exists when R > 2, and that overdissipation of rents does not arise in any Nash equilibrium. We derive a tight lower bound on the level of rent dissipation that arises in a symmetric equilibrium when the strategy space is discrete, and show that full rent dissipation occurs when the strategy space is continuous. Our results are shown to be consistent with recent experimental evidence on the dissipation of rents.
ISSN:0048-5829
1573-7101
DOI:10.1007/BF01053238