We are grateful to Susan Feigenbaum, Hanjoon Jung, Eric Rasmusen, anonymous referees, and seminar participants at Korea University and Sungkyunkwan University for their helpful comments and suggestions. We are also grateful to Jongmin Jeon for excellent research assistance. An earlier version of this paper was presented at the 76th Annual Conference of the Southern Economic Association, Charleston, SC, November 2006. Part of this research was conducted while the first author was a visiting professor at Virginia Polytechnic Institute and State University. This paper was supported by Faculty Research Fund, Sungkyunkwan University, 2008.
DO RENT-SEEKING GROUPS ANNOUNCE THEIR SHARING RULES?
Article first published online: 2 FEB 2010
© 2010 Western Economic Association International
Volume 50, Issue 2, pages 348–363, April 2012
How to Cite
BAIK, K. H. and LEE, D. (2012), DO RENT-SEEKING GROUPS ANNOUNCE THEIR SHARING RULES?. Economic Inquiry, 50: 348–363. doi: 10.1111/j.1465-7295.2009.00280.x
- Issue published online: 2 FEB 2010
- Article first published online: 2 FEB 2010
- Online Early publication February 2, 2010
We study collective rent seeking between two groups in which each group has the option of releasing or not its sharing-rule information. First, we show that the case where both groups release their sharing-rule information never occurs in equilibrium; when the players are unevenly matched, one group releases its sharing-rule information and the other does not. Then, we select the Pareto-superior equilibrium when the players are unevenly matched. We show that, in this selected equilibrium, the underdog releases its sharing-rule information, and the favorite does not; thus, the underdog becomes the leader, and the favorite the follower (JEL D72).