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Rent-seeking with asymmetric valuations

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Abstract

This paper analyzes Tullock's rent-seeking game with asymmetric valuations for a variable range of the returns to scale parameter. A necessary and sufficient condition for a unique pure strategy Nash equilibrium is established. Equilibrium effort and expected profits are determined and subjected to comparative statics analysis. Increasing the underdog's valuation induces both players to increase their efforts. Increasing the favorite's valuation increases his effort but decreases the effort of the underdog. Expected profits increase with a player's valuation but decreases with the valuation of the competitor. The impact of the returns to scale parameter is also analyzed.

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Authors and Affiliations

  1. Smeal College of Business Administration, Penn State University, 308 Beam BAB, University Park, PA, 16802, U.S.A

    Kofi O. Nti

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  1. Kofi O. Nti
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Nti, K.O. Rent-seeking with asymmetric valuations. Public Choice 98, 415–430 (1999). https://doi.org/10.1023/A:1018391504741

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