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Schroyen, Fred and Treich, Nicolas
(2016)
The Power of Money: Wealth Effects in Contest.
Games and Economic Behavior, 100.
pp. 46-48.
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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: | Article |
|---|---|
| Language: | English |
| Date: | November 2016 |
| Refereed: | Yes |
| 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) |
| Site: | UT1 |
| Date Deposited: | 22 Sep 2016 09:13 |
| Last Modified: | 18 Apr 2024 11:56 |
| OAI Identifier: | oai:tse-fr.eu:30894 |
| URI: | https://publications.ut-capitole.fr/id/eprint/22382 |
Available Versions of this Item
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The Power of Money: Wealth Effects in Contest. (deposited 22 Sep 2016 09:11)
- The Power of Money: Wealth Effects in Contest. (deposited 22 Sep 2016 09:13) [Currently Displayed]
