Ambiguous political power and contest efforts

Gil S. Epstein, Igal Milchtaich, Shmuel Nitzan, Mordechai E. Schwarz

פרסום מחקרי: פרסום בכתב עתמאמרביקורת עמיתים

תקציר

When there is incomplete information on the source of power in a contest, the contestants may divide their lobbying efforts between the potential centers of power, only one of which determines the contests' winning probabilities. Our analysis focuses on the effect of ambiguity regarding the source of power on the contestants' aggregate effort in a symmetric, simple lottery contest with two potential centers of power. Specifically, we examine the effects of varying the informativeness of the contestants' private signals (i.e., the probability that a signal is correct) and the degree of correlation between them. Our benchmark case is the standard Tullock's model, in which the source of power is known, i.e., the contestants' signals are perfectly informative. We show that the level of aggregate effort in this case is reached also when the signals are perfectly uninformative. However, in any intermediate case the contestants' aggregate effort is lower, provided that the signals are not perfectly correlated. In other words, there is a U-shape relationship between the informativeness of the signals and the aggregate effort in the contest. The lowest level of effort is spent when the signals are independent and the probability that a signal is true is about 0.85. In this case, efforts are reduced by about one-fifth in comparison with the benchmark case: from a rent dissipation of 50% to slightly over 40%.

שפה מקוריתאנגלית
עמודים (מ-עד)113-123
מספר עמודים11
כתב עתPublic Choice
כרך132
מספר גיליון1-2
מזהי עצם דיגיטלי (DOIs)
סטטוס פרסוםפורסם - יולי 2007

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