Rents, dissipation and lost treasures: Rethinking Tullock's paradox

Giuseppe Dari-Mattiacci, Francesco Parisi

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

In this paper we revisit Tullock's paradox (Tullock, 1980) and consider a rent-seeking game in which parties face increasing returns to effort. We allow parties to randomize their strategies and give them an exit option. Given the mixed participation strategies of the parties, valuable rents may occasionally remain unexploited. We consider such a lost-treasure effect as an additional cost of rent seeking and examine how the expected value of such a lost rent varies with changes in the parameters of the problem.

Original languageEnglish (US)
Pages (from-to)411-422
Number of pages12
JournalPublic Choice
Volume124
Issue number3-4
DOIs
StatePublished - Sep 2005

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