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Tullock Rent-Seeking Contest and its Solution in Secure Strategies

Working paper
Author/s: 
Zakharov A., Iskakov M., Iskakov A., and Tullock
Issue number: 
WP7/2013/01
Year: 
2013
Webpage [1]
It is well known that a pure-strategy Nash equilibrium does not exist for a two-player rentseeking contest when the contest success function parameter α is greater than two. We analyze the contest using the concept of an equilibrium in secure strategies, which is a generalization of the Nash equilibrium. It is defined by two conditions: no one can get profit from worsening the situation of other players and no one can get profit without creating a threat to lose more than he gains. We show that such an equilibrium always exists. Moreover, for α > 2 it is unique up to a permutation, and has a lower rent dissipation than in a mixed-startegy Nash equilibrium.

Source URL:http://coalitiontheory.net/content/tullock-rent-seeking-contest-and-its-solution-secure-strategies

Links
[1] http://publications.hse.ru/en/preprints/96130806