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Schroyen, Fred and Treich, Nicolas
(2016)
The Power of Money: Wealth Effects in Contest.
TSE Working Paper, n. 16-699
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Abstract
The relationship between wealth and power has long been debated. Nevertheless, this relationship has been rarely studied in a strategic game. In this paper, we study wealth effects in a strategic contest game. Two opposing effects arise: wealth reduces the marginal cost of effort but it also reduces the marginal benefit of winning the contest. We consider three types of contests which vary depending on whether rents and efforts are commensurable with wealth. Our theoretical analysis shows that the effects of wealth are strongly "contestdependent". It thus does not support general claims that the rich lobby more or that low economic growth and wealth inequality spur conflicts.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | September 2016 |
| Uncontrolled Keywords: | Conflict, contest, rent-seeking, wealth, risk aversion, lobbying, power, redistribution |
| JEL Classification: | C72 - Noncooperative Games D72 - Economic Models of Political Processes - Rent-Seeking, Elections, Legislatures, and Voting Behavior |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse Capitole |
| Site: | UT1 |
| Date Deposited: | 22 Sep 2016 09:11 |
| Last Modified: | 02 Apr 2021 15:54 |
| OAI Identifier: | oai:tse-fr.eu:30893 |
| URI: | https://publications.ut-capitole.fr/id/eprint/22381 |
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