Returns to effort in rent-seeking games

G. Dari-Mattiacci, F. Parisi

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)

Abstract

In the traditional formulation of rent-seeking games, increasing returns to effort are characterized by an exponent r>1. However, when the value of the rent is normalized to 1, the players’ effort levels a and b will typically be less than 1. Thus, when a<1>1, the value of a r decreases as r increases, contradicting the interpretation of r>1 as representing increasing returns to effort. This apparent defect in the mathematization of the problem seems to suggest that a different interpretation of r is required whenever aa.
Original languageEnglish
Pages (from-to)99-104
JournalPublic Choice
Volume159
Issue number1
Early online date10 Sep 2012
DOIs
Publication statusPublished - Apr 2014

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