Intra-Group Heterogeneity in Asymmetric Contests with Free Riding
نویسنده
چکیده
This article analyzes an asymmetric rent-seeking contest with free riding where valuation on the prize (rent) and effectiveness of rent-seeking effort may differ among agents and the victory of an agent may not exclude some agents other than the winner of the contest to consume the prize of the contest. After proving the unique existence of pure-strategy Nash equilibrium, this article examines how an increase in agent’s characteristic changes equilibrium winning probabilities and how an increase in intra-group heterogeneity affects equilibrium winning probabilities. This article also presents a lobbying model of tariff determination as an example of asymmetric rent-seeking contests with free riding, applies general results to this specific example and compares the results with the ones known in the literature of international economics. JEL Classification Numbers: C72, D43, F12, L13.
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