The Structure of Contests and the Extent of Dissipation

Abstract

The formal analysis of rent seeking contests has largely concerned itself with models of individual rent seekers competing on their own against everybody else. Yet rent seeking in the real world often takes place between interest groups, who act as collectives in competition with other interest groups, or between lobbyists acting on behalf of interest groups or individuals, or in one of many other more complicated forms. This chapter considers how various contest structures affect aggregate equilibrium efforts or expenditures. Open entry into rent seeking, delegation, rent seeking by groups, and within-group conflict over the spoils of rent seeking could all lead to lower aggregate efforts than individualistic rent seeking. The chapter also notes that self-selection into contests of potential contestants may have the property of maximizing dissipation.