On the relative sequencing of internal and external rent-seeking contests

Article Type

Research Article

Publication Title

Public Choice

Abstract

We consider rent-seeking contests between and within two equal-sized groups. For each group, the internal contest may precede, follow, or occur alongside the external contest. We rank the nine possible combinations according to rent-seeking expenditure and expected utilities. Rent-seeking is maximum when both internal contests either precede or occur alongside the external contest. These forms have identical, Pareto-dominated welfare consequences. Rent-seeking is minimized if the between-group contest precedes the within-group contest for one group but follows it for the other. The randomized version of this form is uniquely Pareto efficient among all contest forms that ensure ex-ante equal treatment. When the groups independently choose the contest sequence, the unique Nash equilibrium maximizes rent-seeking and is Pareto-dominated. When a multi-member group battles a single-member one, the efficient sequence choice can be sustained if the larger group can resolve its internal coordination problem. With unequal groups and symmetric contest sequencing, the one-tier contest form may be Pareto efficient despite generating greater rent-seeking than all symmetric two-tier forms.

DOI

10.1007/s11127-025-01345-7

Publication Date

1-1-2025

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