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Rent-seeking for a public good with additive contributions

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Abstract

We analyze rent-seeking for a public good with two groups, where the provision of a public good is decided in the all-pay contest where “the winner takes all”. We assume that the valuation of the public good varies across groups, but is the same for all members within a group. Free-riding in such situation was predicted by Baik et al. (J Public Econ 82(3):415–429, 2001). We describe a continuum of equilibria where all players make contributions. There is room for substantial payoff asymmetry, which ranges from equal payoffs to all group members to a zero payoff for the player who makes a contribution and positive payoffs for free-riders. The results generalize for the case where the prize has both a private and a public component.

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Notes

  1. Note that the Lebesgue measure of such \(z\) is positive.

  2. Clearly, in this case \(v_1>v_2\).

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Authors and Affiliations

  1. Department of Finance and Economics, Mississippi State University, 114 McCool Hall, Starkville, MS, 39762, USA

    Iryna Topolyan

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  1. Iryna Topolyan
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Correspondence to Iryna Topolyan.

Additional information

The author thanks Dan Kovenock for valuable advice and many helpful discussions, Bettina Klose and Seth Streitmatter for helpful conversations. She is grateful to the Editor and two anonymous referees for many helpful and constructive suggestions which improved the paper.

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Topolyan, I. Rent-seeking for a public good with additive contributions. Soc Choice Welf 42, 465–476 (2014). https://doi.org/10.1007/s00355-013-0741-3

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  • DOI: https://doi.org/10.1007/s00355-013-0741-3

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