Rent-seeking group contests with one-sided private information

*Lambert Schoonbeek
Department of Economics, Econometrics and Finance, Universit

Rob J. Everhardt
Department of Economics, Econometrics and Finance, University of Groningen

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     Last modified: January 13, 2011
     Presentation date: 03/12/2011 4:30 PM in NH 1120, Session A
     (View Schedule)

Abstract
We consider a rent-seeking contest where players compete in groups for a prize of given value. One group has private information about its number of members, which can be either small or large. The other groups have possibly different but publicly known sizes. We show that the contest has a unique equilibrium in which players of the same group exert the same effort level. We also present the necessary and sufficient conditions under which groups exert a positive or zero equilibrium effort.