COMPETITIVE-SHARE GROUP FORMATION IN RENT-SEEKING CONTEST

We examine the possibility of forming a competitive-share group in ren t-seeking contests. The competitive-share group has the following char acteristics: (a) the group is treated as a single player competing wit h the nonmembers to win the rent, (b) the members choose their outlays noncooperatively, and (c) the members compete to take larger shares o f the rent. We show that the competitive-share group is always formed voluntarily. One important consequence of such group formation is that rent dissipation is less relative to individual rent seeking - in oth er words, the social cost associated with rent seeking is less.