COMPARATIVE STATICS OF CONTESTS AND RENT-SEEKING GAMES

This paper develops the comparative statics properties of a contest en countered in patent races and rent-seeking games. I show that symmetri c equilibrium expenditure and profit per player decrease with the numb er of competitors and the discount rate, but increase with the value o f the prize. A fundamental lemma established in the paper shows that a stability condition usually imposed on the model is automatically sat isfied. I identify a class of likelihood or hazard rate functions for which aggregate expenditure increases with the number of competitors a nd total profits converge to zero.