Premium
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)