Endogenous sharing rules in collective-group rent-seeking

Lee, Sanghack

doi:10.1007/bf01047900

Cited by 86 publications

(58 citation statements)

References 18 publications

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“…In this case, part of the prize is divided equally among the group members (according to the egalitarian rule) and the rest is divided proportionally according to the members' efforts (according to the relative effort rule), which works as a selective incentive 6 . Lee (1995) and Ueda (2002) examine the endogenous determination of group sharing rules that belong to this class.…”

Section: Introductionmentioning

confidence: 99%

Prize sharing in collective contests

Nitzan

Ueda

2011

European Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In each group the members decide how much effort to put without observing the sharing rules of the other groups. It is shown that endogenous determination of group sharing rules completely eliminates the group-size paradox, i.e. a larger group always attains a higher winning probability than a smaller group, unless the prize is purely private. In addition, an interesting pattern of equilibrium group sharing rules is revealed: the group attaining the lower winning probability is the one choosing the rule giving higher incentives to the members. Terms of use: Documents inKeywords: collective contest, mixed public-good prize, endogenous sharing rules, the groupsize paradox. Shmuel Nitzan Department of EconomicsBar Ilan University Ramat Gan, 52900 Israel nitzans@mail.biu.ac.il Kaoru Ueda Faculty of EconomicsNanzan University Nagoya, We are very much indebted to two anonymous referees and an associate editor for their most useful suggestions.2

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Section: Introductionmentioning

confidence: 99%

Prize sharing in collective contests

Nitzan

Ueda

2011

European Economic Review

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“…1 The first is collective rent seeking (Katz et al, 1990;Baik and Shogren, 1995;Hausken, 1995aHausken, ,b, 1998Baik and Lee, 1997;Lee, 1995;Nitzan, 1991aNitzan, ,b, 1994. The second is the analysis of the impact of product-market competition on managerial slack (Hart, 1983;Horn et al, 1995;Tirole, 1988;Vickers, 1995;Winter, 1971).…”

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confidence: 99%

Migration and intergroup conflict

Hausken

2000

Economics Letters

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“…Taking the combined ratio as an exogenous choice, Nitzan (1991aNitzan ( , 1991b, Davis and Reilly (1999), and Ueda (2002) study how equilibrium e¤ort changes with this ratio. Lee (1995), Baik and Shogren (1995), Baik and Lee (1997), and Noh (1999 further endogenize the sharing rule and …nd that alliances of symmetric group size choose the proportional sharing rule, even though they would be better o¤ if everyone chose equal sharing rule. In reality, both equal and proportional sharing rules have disadvantages.…”

Section: Introductionmentioning

confidence: 99%

Fight Alone or Together? The Need to Belong

2011

SSRN Journal

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Alliances often face both free-riding and hold-up problems, which undermine the e¤ectiveness of alliances in mobilizing joint …ghting e¤ort. Despite of these disadvantages, alliances are still ubiquitous in all types of contests. This paper asks if there are non-monetary incentives to form alliances, e.g., intimidating/discouraging the single player(s) who is/are left alone. For this purpose, I compare symmetric (2 vs. 2) and asymmetric (2 vs. 1) contests to their equivalent 4-player and 3-player individual contests, respectively.We …nd that alliance players in symmetric (2 vs. 2) contests behave the same as those in equivalent 4-player individual contests. However, in asymmetric (2 vs. 1) contests, stand-alone players were strongly discouraged to exert e¤ort (especially the females), compared to the 3-player individual contests. Alliance players may have anticipated this e¤ect and also reduced their e¤ort, if alliances share the prize according to the merit rule. Behavioural factors such as the need to belong can help reconcile the "paradox of alliance formation".

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Endogenous sharing rules in collective-group rent-seeking

Cited by 86 publications

References 18 publications

Prize sharing in collective contests

Prize sharing in collective contests

Migration and intergroup conflict

Fight Alone or Together? The Need to Belong

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