RENT DISSIPATION AND EFFICIENCY IN A CONTEST WITH ASYMMETRIC VALUATIONS

Authors
Citation
Tm. Hurley, RENT DISSIPATION AND EFFICIENCY IN A CONTEST WITH ASYMMETRIC VALUATIONS, Public choice, 94(3-4), 1998, pp. 289-298
Citations number
12
Categorie Soggetti
Economics,"Political Science
Journal title
ISSN journal
00485829
Volume
94
Issue
3-4
Year of publication
1998
Pages
289 - 298
Database
ISI
SICI code
0048-5829(1998)94:3-4<289:RDAEIA>2.0.ZU;2-Z
Abstract
This paper introduces contest efficiency as an alternative to rent dis sipation when measuring efficiency in a contest with asymmetric valuat ions. Contest efficiency is defined as the expected proportion of the maximum obtainable benefit captured by the contest, and differs from r ent dissipation because it values the expected winner of the contest. Therefore, rent dissipation and contest efficiency may suggest contrad ictory conclusions when agents have asymmetric valuations. This result is illustrated when comparing alternative equilibria in contests with asymmetric reimbursement and when analyzing the comparative static ef fect of a change in the relative benefit of two agents in a Cournot-Na sh contest.