INFORMATION AND ENDOGENOUS DELEGATION IN A RENT‐SEEKING CONTEST | Zendy

Schoonbeek Lambert | Zendy

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INFORMATION AND ENDOGENOUS DELEGATION IN A RENT‐SEEKING CONTEST

Author(s) -

Schoonbeek Lambert

Publication year - 2017

Publication title -

economic inquiry

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.823

H-Index - 72

eISSN - 1465-7295

pISSN - 0095-2583

DOI - 10.1111/ecin.12444

Subject(s) - delegate , contest , delegation , rent seeking , economics , value (mathematics) , microeconomics , law , political science , computer science , management , machine learning , politics , programming language

We offer a new explanation for the occurrence of delegation in rent‐seeking contests. We consider a two‐player contest for a prize of common value. The players only know that the prize is high or low, with given probabilities. Each player can hire a delegate to act on his behalf. After a delegate is hired, she privately observes the true value of the prize. We derive the conditions under which, respectively, no player, only one player, or both players delegate in equilibrium. ( JEL D7)

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