Strategic Groups and Rent Dissipation

Baik, Kyung Hwan; Lee, Sanghack

doi:10.1093/ei/39.4.672

Cited by 68 publications

(66 citation statements)

References 39 publications

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“…If A and B express diverging preferences, they are matched into an alliance with probability 1=2 and stand alone otherwise. 10 At the beginning of stage 2, the decisions of players A and B are displayed to all three players A, B, and C within a group. The subgame reached ("2-1" or "1-1-1") follows exactly the same rules as in the NO CHOICE treatment.…”

Section: Experimental Treatmentsmentioning

confidence: 99%

Endogenous Group Formation in Experimental Contests

2012

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We study endogenous group formation in tournaments employing experimental three-player contests. We …nd that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending e¤ort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower e¤ort. Anticipation of this exploitation may explain their preference to stand alone.JEL codes: D72, D74

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Section: Experimental Treatmentsmentioning

confidence: 99%

Endogenous Group Formation in Experimental Contests

2012

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“…The assumption embedded in (51), that members of the group, with n k > 1, must compete for a share of the prize (µ > 0), departs from the assumption made by otherse.g., Baik and Lee (2001), Noh (2002) andBloch et. al.…”

Section: Stage 2: Intra-group Conflictmentioning

confidence: 99%

Economics of Conflict: An Overview

2006

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Abstract. In this chapter, we review the recent literature on conflict and appropriation. Allowing for the possibility of conflict, which amounts to recognizing the possibility that property rights are not perfectly and costlessly enforced, represents a significant departure from the traditional paradigm of economics. The research we emphasize, however, takes an economic perspective. Specifically, it applies conventional optimization techniques and game-theoretic tools to study the allocation of resources among competing activities-productive and otherwise appropriative, such as grabbing the product and wealth of others as well as defending one's own product and wealth. In contrast to other economic activities in which inputs are combined cooperatively through production functions, the inputs to appropriation are combined adversarially through technologies of conflict.A central objective of this research is to identify the effects of conflict on economic outcomes: the determinants of the distribution of output (or power) and how an individual party's share can be inversely related to its marginal productivity; when settlement in the shadow of conflict and when open conflict can be expected to occur, with longer time horizons capable of inducing conflict instead of settlement; how conflict and appropriation can reduce the appeal of trade; the determinants of alliance formation and the importance of intra-alliance commitments; how dynamic incentives for capital accumulation and innovation are distorted in the presence of conflict; and the role of governance in conflict management.JEL Classification: D30, D70, D72, D74, H56, O17.

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“…6 This class of group sharing rules has an alternative interesting interpretation. As argued by Baik (1994) and Baik and Lee (2001), it can be interpreted as a "winner-help-loser" agreement, or a self insurance device applied by the groups. 7 Ursprung (1990) provides an interesting application of this kind of collective contests to a twocandidate electoral competition.…”

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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Strategic Groups and Rent Dissipation

Cited by 68 publications

References 39 publications

Endogenous Group Formation in Experimental Contests

Endogenous Group Formation in Experimental Contests

Economics of Conflict: An Overview

Prize sharing in collective contests

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