Rentseeking by Players with Constant Absolute Risk Aversion


We introduce a novel method of modelling Tullock rent-seeking contests that avoids the complexities encountered by the ‘best response function’ approach. We analyse contests in which there are many risk averse players differing in their attitudes to risk. We establish that, if every player has a constant degree of absolute risk aversion, a unique equilibrium exists. We also establish comparative static results and examine how the level of rent dissipation is affected by the heterogeneity of attitudes towards risk and the precise nature of the technology. JEL classification: C72, D72 Corresponding Author: Roger Hartley Department of Economics Keele University Keele ST5 5BG

Cite this paper

@inproceedings{Cornes2001RentseekingBP, title={Rentseeking by Players with Constant Absolute Risk Aversion}, author={Richard C. Cornes and Roger Hartley}, year={2001} }