Risk-aversion and prudence in rent-seeking games

Nicolas N. Treich (1)

1 LERNA - Economie des Ressources Naturelles

This paper considers a common n-agent symmetric rent-seeking game It derives conditions so that risk-aversion and risk always decrease rent-seeking efforts These conditions hold for any regular contest success function when risk-averse rent-seekers are also prudent Under n = 2, prudence is a necessary and sufficient condition for risk-aversion to decrease rent-seeking efforts compared to risk-neutrality An intuition for this result is given based on a self-protection model

Mots clés: BEHAVIOR; Risk-aversion; Rent-seeking; Lobbying; Uncertainty; Prudence; Self-protection; CONTESTS

Domaines: Sciences de l'Homme et Société

Nicolas N. Treich. Risk-aversion and prudence in rent-seeking games. Public Choice, 2010, 145 (3-4), pp.339 - 349. ⟨10.1007/s11127-009-9569-x⟩. ⟨hal-02665935⟩