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An approximate solution to rent-seeking contests with private information

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  • Gallice, Andrea

Abstract

We propose an approximate solution to rent-seeking contests in which participants have heterogeneous and private valuations. The procedure only requires common knowledge about the mean of the distribution of valuations. We obtain a closed-form expression for an agent’s level of investment and subject it to comparative statics analysis. We then assess the performance of the model and find that the proposed solution provides a remarkably effective approximation of the optimal solution for a wide range of parameter specifications.

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  • Gallice, Andrea, 2017. "An approximate solution to rent-seeking contests with private information," European Journal of Operational Research, Elsevier, vol. 256(2), pages 673-684.
    • Handle: RePEc:eee:ejores:v:256:y:2017:i:2:p:673-684
    DOI: 10.1016/j.ejor.2016.07.039
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    3. Sumit Goel, 2022. "Optimal grading contests," Papers 2205.05207, arXiv.org, revised Nov 2024.
    4. Segev, Ella, 2020. "Crowdsourcing contests," European Journal of Operational Research, Elsevier, vol. 281(2), pages 241-255.
    5. Ratul Lahkar & Rezina Sultana, 2023. "Rent dissipation in large population Tullock contests," Public Choice, Springer, vol. 197(1), pages 253-282, October.
    6. Zhang, Mengdi & Shen, Qiao & Zhao, Zhiheng & Wang, Shuaian & Huang, George Q., 2024. "Commitment or rent-seeking? Government incentive policies for ESG reporting in sustainable e-commerce logistics," International Journal of Production Economics, Elsevier, vol. 268(C).

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