Article

Risky Rents

Jean-Daniel Guigou, Bruno Lovat, and Nicolas Treich

Abstract

We consider a strategic contest game in which risk-averse agents exert efforts to increase their share of a risky rent. We show that a unique symmetric equilibrium always exists under constant or decreasing absolute risk aversion. We also show that agents exert in general less efforts when they are more risk averse or when the rent is more risky.

Keywords

Contest; Rent seeking; Risk; Risk aversion; Shared rents;

Replaces

Jean-Daniel Guigou, Bruno Lovat, and Nicolas Treich, Risky Rents, TSE Working Paper, n. 16-710, October 2016.

Reference

Jean-Daniel Guigou, Bruno Lovat, and Nicolas Treich, Risky Rents, Economic Theory Bulletin, vol. 5, n. 2, October 2017, pp. 151–164.

See also

Published in

Economic Theory Bulletin, vol. 5, n. 2, October 2017, pp. 151–164