THE THRILL OF VICTORY, THE AGONY OF DEFEAT

This paper presents experimental evidence from a rent-seeking exercise where the highest bidder wins the rent, but all bidders, including th e winner, lost their wagers. This exercise closely resembles the rent- seeking dilemma facing agents in many settings. There are two main con clusions from the results. First, there is a tendency towards overdiss ipation of the rent. Second, some individuals are willing to pay more for a rent than its face-value would warrant. We attribute this phenom enon to a ''thrill of victory'' effect.