Rent dissipation and streamlined costs: Laboratory experiments☆

• 成果类型: Article
• 署名作者: Holt, Charles A.; Smith, Angela M.
• 署名单位: University of Virginia; James Madison University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2023.10.014
• 发表日期: 2026
• 关键词: All-pay auctions; players models; welfare costs; risk-aversion; seeking; games

摘要

The effect of group size and effort cost on rent dissipation in the standard Tullock rent seeking model is examined using a laboratory experiment. Data support qualitative comparative static Nash equilibrium predictions as reductions in both group size and effort cost increase effort levels. However, effort and dissipation rates are above Nash predictions for all treatments. In addition, while cutting per-unit effort costs in half increases individual effort levels, they do not fully double as predicted and therefore lower rent dissipation, creating a policy-relevant streamlining effect. A quantal response equilibrium, which adds stochastic elements into the game structure, predicts the observed higher effort levels and dissipation but is proven to be unable to explain the streamlining effect. A modification of quantal response that incorporates implementation error noise and loss aversion outperforms other estimated models and tracks the observed all data patterns more closely, including the streamlining effect.