The incidence of overdissipation in rent-seeking contests

Tullock's analysis of rent seeking and overdissipation is reconsidered. We show that, while equilibrium strategies do not permit overdissipation in ex pectation, for particular realizations of players' mixed strategies the tot al amount spent competing for rents can exceed the value of the prize. We a lso show that the cross-sectional incidence of overdissipation in the perfe ctly discriminating contest ranges from 0.50 to 0.44 as the number of playe rs increases from two to infinity. Thus, even though the original analysis of overdissipation is flawed, there are instances in which rent-seekers spe nd more than the prize is worth.