Prize-sharing rules in collective rent-seeking

Flamand, Sabine and Troumpounis, Orestis (2015) Prize-sharing rules in collective rent-seeking. In: Companion to the political economy of rent seeking. Edward Elgar Publishing, Cheltenham, pp. 92-112. ISBN 9781782544937

Abstract

We review our knowledge as to how different ways of sharing a prize among the members of a group in collective rent-seeking affect individuals' incentives to contribute to their group's aggregate effort. Starting with Nitzan (1991), the literature has considered both exogenous and endogenous sharing rules, while it has assumed that the choice of such rules may occur under either public or private information. In turn, group sharing rules affect the extent of total rent dissipation, the occurrence of the group size paradox, group formation, and the choice between productive and appropriative activities.