effort levels in contests with two asymmetric players a contest is a situation in which players compete with one another by expending effort to win a prize examples abound firms compete by spending rd 26 krueger 14 posner 20 rogerson 23 appelbaum and katz 1 hillman and riley 12 hirshleifer 13 ellingsen 8 nitzan 18 and baik 2 3 have studied rent seeking contests lazear and rosen 15 o keeffe viscusi and zeckhauser 19 and rosen 24 have examined performance incentives associated with reward schemes riley 22 has analyzed the war of attrition and auctions dixit 7 has considered strategic commitments in contests with different applications these are only a part of the literature on the theory of contests despite the vast literature however the effects of asymmetries between players have not been clarified except by harris and vickers 11 who analyze in a patent race model the strategic consequences of asymmetries the purpose of this paper is to examine the effects of asymmetries between two players on individual and total effort levels in a model with a logit form probability of winning function effort levels expended by the players deserve attention effort in a rent seeking contest is interpreted as social costs and thus total effort level is a measure of economic efficiency effort in an r d contest is interpreted as r d expenditures and thus effort levels determine the expected date of invention we focus on asymmetries between the players resulting from their different valuations of the prize their different abilities to convert effort into probability of winning or both such asymmetries are common in contests for example people in different locations may receive different

the optimal sorting of players in contests between groups abstract we study how aggregate effort exerted in contests between groups of heterogeneous players depends on the sorting of players into groups we show that the optimal sorting depends on the curvature of the effort cost function from the perspective of a contest organizer whose objective is to maximize aggregate effort it is optimal to sort players in a way that minimizes the variation in ability across groups if the effort cost function is moderately steep however for a sufficiently steep effort cost function the optimal sorting of players may be the one that maximizes the variation in ability across groups

the determinants of equilibrium unemployment in britain a lot of energy is currently being expended in trying to understand what has been happening to unemployment in britain and the rest of the developed world in this paper we look at this question in the british context by trying to confront some possible explanations with the data since the data we use are quarterly over rather a short period we are setting the explanations a very hard test most explanations tend to be rather casual and the theories underpinning them ill developed thus for example the so called real wage argument is based on the idea that real wages affect labour demand and that the equilibrium real wage bears some relatively stable relationship to output per head but how stable is not clear thus whether or not we can expect a well defined stable ceteris paribus dynamic relationship between real product wages as a proportion of output per head and unemployment is equally unclear so if such a relationship does not show up in a quarterly regression model this may not be that serious for the theory nevertheless we must look for the relationship for how else are we ever to discriminate between a plethora of conflicting views the primary emphasis in this paper is on the secular factors affecting unemployment rather than the cyclical variables consequently we shall not be concerned with developing a coherent theory of cyclical fluctuations and in the empirical work we shall control for the cycle simply by making use of those exogenous or predetermined variables which other work in this field suggests are important 2 the remainder of the paper is set out as follows the next section is concerned with specifying a model which generates a definition of equilibrium unemployment the outline of this model is a pair of equations determining the flows into and out of unemployment and these are specified in section ii which looks closely at the possible variables involved section iii then deals with the results and presents some general conclusions

rent seeking with asymmetric valuations addition or deletion of a player we consider an extension of tullock s 1980 n player contest under which prize valuations may vary across players we show that the pure strategy equilibrium of this contest is unique we also establish the following results rent dissipation increases individual winning probabilities decrease and individual spending either increases or decreases with the addition of a player

rent seeking and rent setting with asymmetric effectiveness of lobbying this paper provides a more general model of the determination of rent seeking costs by combining the following features endogenous rent determination asymmetric effectiveness of contending agents in their lobbying efforts and multiple periods in doing so the paper generalizes some aspects of the work of applelbaum and katz 1987 rogerson 1982 leininger 1992 and kohli 1992 some results obtained are i in the short run when the regulator s salary is higher than in an alternative occupation both the per unit cost of rent seeking and the total rent set by regulator are highest for the same value of the relative effectiveness parameter ii in the long run an increase in the effectiveness parameter leads to a reduction in the social costs of rent seeking iii in a repeated game the equilibrium rent is lower the higher is the regulator s discount factor

the attack and defense group contests best shot versus weakest link this study analyzes a group contest in which one group defenders follows a weakest link whereas the other group attackers follows a best shot impact function if we fully characterize the nash and coalition proof equilibria and show that with symmetric valuation the coalition proof equilibrium is unique up to the permutation of the identity of the active player in the attacker group with asymmetric valuation it is always an equilibrium for one of the highest valuation players to be active it may also be the case that the highest valuation players in the attacker group free ride completely on a group member with a lower valuation however in any equilibrium only one player in the attacker group is active whereas all the players in the defender group are active and exert the same effort we also characterize the nash and coalition proof equilibria for the case in which one group follows either a best shot or a weakest link but the other group follows an additive if jel c72 d70 d72 d74 h41

the determinants of equilibrium unemployment in britain a comment in a recent paper nickell 1982 has focused on an empirically neglected aspect of unemployment the flows into and out of the stock he estimates that the natural or equilibrium rate doubled from i967 2 56 to 1979 5 82 almost all unemployment is held to be due to equilibrium or secular forces in this comment we make a number of points whose effect is to cast some doubt on these results

lottery versus all pay auction contests a revenue dominance theorem abstract we allow a contest organizer to bias a contest in a discriminatory way i e she can favor specific contestants by designing the contest rule in order to maximize total equilibrium effort resp revenue the two predominant contest regimes are considered all pay auctions and lottery contests for all pay auctions the optimal bias is derived in closed form it implies extreme competitive pressure among active contestants and low endogenous participation rates moreover the exclusion principle advanced by baye et al 1993 becomes obsolete in this case in contrast the optimally biased lottery induces a higher number of actively participating contestants due to softer competition our main result regarding total revenue comparison under the optimal biases reveals that the all pay auction revenue dominates the lottery contest for all levels of heterogeneity among contestants the incentive effect due to a strongly discriminating contest rule all pay auction dominates the participation effect due to a weakly discriminating contest rule lottery

inferred and stated attribute non attendance in food choice experiments we review the current literature on attribute non attendance in stated choice and use data from beef and chicken choice experiments using both inference and the respondents own statements inference is based on panel data analysis by mixed logit models of choice with both discrete and continuous mixtures of coefficients and is conditional on the observed pattern of choice information from respondent statements on non attendance is directly embedded in the specification of the indirect utility function results show no clear winner between the inferential approaches but the inference based on constrained latent class panel models better matches the observed data

the incentive effects of levelling the playing field an empirical analysis of amateur golf tournaments levelling the playing field is an important policy instrument to guarantee an equitable competition among heterogeneous individuals however the incentive effects of those policies are usually not explicitly addressed in empirical studies in this article the performance in amateur golf tournaments is analysed to gain insights into the incentive effects of those types of policies the empirical analysis takes advantage of the fact that tournaments in amateur golf are of two distinctive types that apply different scoring rules while one scoring rule is based on gross scores i e the total number of strokes of a player the second scoring rule is based on net scores where the total number of strokes is normalized with respect to the respective player s handicap performance comparisons of players who participated in both types of tournaments suggest that levelling the playing field as in tournaments based on net score has positive and significant performance effects

olson s logic of collective action at fifty in the 50 years since its publication mancur olson s logic of collective action has had an enormous impact on the academic literature in both economics and political science in this review essay i discuss olson s work in light of the ensuing research particularly developments in the theoretical literature much of the discussion focuses on the group size paradox as applied to politics i e the extent to which the group size paradox can explain why the interests of some groups are better represented in the political process than others i also discuss selective incentives with an emphasis on the byproduct mechanism under which a firm sells a private good and uses the resulting profits to provide a public good

dyke maintenance and other stories some neglected types of public goods the orthodox summation model of a pure nonexcludable public good assumes that each individual consumes a quantity of public good defined as the sum of all individuals contributions to that good recently hirshleifer 1983 1985 has analyzed models that do not fall within this class at one extreme is the weakestlink in which the total quantity available to each consumer equals the smallest individual contribution at the other is the best shot in which the total quantity available equals the largest individual contribution hirshleifer s example of the weakest link case concerns a circular region of which each citizen owns a pie shaped slice the perimeter is marked by a dyke floods may penetrate the weakest point of the dyke and cause damage equally throughout the region each citizen decides the height and state of repair of that section of the dyke adjoining his piece of land its maintenance constituting his contribution to the public good thus the level of protection enjoyed by all is determined by the least well maintained section of the dyke an example of the best shot case concerns a number of antimissile batteries ringing a city firing at an incoming icbm all that matters is the accuracy of the best shot bliss and nalebuff 1984 discuss dragon slaying as another example of a best shot situation section ii of this paper introduces a class of functions of which the summation weakest link and best shot are examples section iii analyzes the properties of equilibrium when consumers have identical tastes and incomes section iv analyzes the implications of income redistribution in the summation case the equilibrium is unaffected by the initial redistribution over a range and outside that range transfers help the recipient and hurt the donor within the broader class of models however the invariance property does not generally hold and there may be opportunities for paretoimproving income redistribution i give an example similar to the weakest link case in which a pareto improving redistribution is

consequences of participant inattention with an application to carbon taxes for meat products despite widespread use in nonmarket valuation data quality remains an ongoing challenge for survey methods one key concern is whether participants attentively respond to survey questions or whether they exert less than full effort to determine the prevalence and consequences of inattention bias in surveys we estimate how meat demand varies across people who do and do not miss trap questions using a split sample design with discrete choice experiments for meat products we explore three different trap questions to determine how many potentially inattentive respondents are identified by each method we find that individuals who miss trap questions respond differently to the choice experiment than individuals who correctly answer the trap question inattention generates vastly different compensating variation estimates of a carbon tax ranging from 3 56 cents per meal choice for the least attentive to 6 13 cents per meal choice for the most attentive

incorporating discontinuous preferences into the analysis of discrete choice experiments data from a discrete choice experiment on improvements of rural landscape attributes are used to investigate the implications of discontinuous preferences on willingness to pay estimates using a multinomial error component logit model we explore differences in scale and unexplained variance between respondents with discontinuous and continuous preferences and condition taste intensities on whether or not each attribute was considered by the respondent during the evaluation of alternatives results suggest that significant improvements in model performance can be achieved when discontinuous preferences are accommodated in the econometric specification and that the magnitude and robustness of the willingness to pay estimates are sensitive to discontinuous preferences

behavior in group contests a review of experimental research group contests are ubiquitous some examples include warfare between countries competition between political parties team incentives within firms group sports and rent seeking in order to succeed members of the same group have incentives to cooperate with each other by expending individual efforts however since effort is costly each member also has an incentive to abstain from expending any effort and instead free ride on the efforts of other members contest theory shows that the intensity of competition between groups and the amount of free riding within groups depend on the group size sharing rule group impact function contest success function and heterogeneity of players we review experimental studies testing these theoretical predictions almost all studies of behavior in group contests find significant over expenditure of effort relative to the theory we discuss potential explanations for such over expenditure including the utility of winning bounded rationality relative payoff maximization parochial altruism and social identity despite over expenditure most studies find support for the comparative statics predictions of the theory with the exception of the group size paradox finally studies show that there are effective mechanisms that can promote within group cooperation and conflict resolution mechanisms that can de escalate and potentially eliminate between group conflict

influencing rent seeking contests this paper shows that a policy that uniformly increases contestants effort costs can lead to an increase in total effort in asymmetric settings this levels the playing field and therefore encourages weaker players who otherwise would have stayed out to enter paradoxically a contest designer whose only objective is to maximize total effort may thus wish to make rent seeking more difficult these results suggest that the often lamented bureaucratic red tape might in fact be a rational response to the problem of attracting lobbyists to participate in a contest

transfer seeking and avoidance on the full social costs of rent seeking we would like to thank gordon tullock and an anonymous referee of this journal for their helpful comments and suggestions this abstract was borrowed from another version of this item

voluntary public good provision with private information using order statistics abstract we study the voluntary provision of a public good with private information when inputs are not perfectly substitutable modeling the production function as a mixture of order statistics of individual efforts we bridge the extreme best shot and weakest link technologies passing through summation in a tractable framework in contrast with existing predictions increasing complementarity results in increased public good provision if the marginal cost of effort rises sufficiently fast

asymmetric two stage group rent seeking comparison of two contest structures two variations of a two stage rent seeking contest areconsidered in the first stage of the between groupmodel groups compete through the expenditure of resources bytheir members based on group expenditures one winning groupis probabilistically determined on the second stage membersof the winning group compete with one another for an exogenousprize in the semi finals model a player is chosen fromeach group and then these players compete for the prize groups differ in size or in their valuation of the prize subgame perfect equilibrium solutions are constructed forthese two contest structures

quitters never win the adverse incentive effects of competing with superstars internal competition may motivate worker effort yet the benefits of competition may depend critically on workers relative abilities large skill differences may reduce efforts i use panel data from professional golf tournaments and find that the presence of a superstar is associated with lower performance on average golfers first round scores are approximately 0 2 strokes worse when tiger woods participates relative to when woods is absent the overall tournament effect is 0 8 strokes the adverse superstar effect varies with the quality of woods s play there is no evidence that reduced performance is attributable to media attention intensity or risky strategy adoption

the max min group contest weakest link group all pay auction we investigate a group all pay auction in which each group s effort is represented by the minimum among the effort levels exerted by the group members and the prize is a group specific public good we fully characterize the symmetric equilibria for two groups there are four types of equilibria the pure strategy equilibria in which all active players exert the same effort the semi pure strategy equilibria in which the players in a group play the same pure strategy whereas those in the other group play the same mixed strategy the nondegenerate mixed strategy equilibria with continuous support and the nondegenerate mixed strategy equilibria with discontinuous support we then analyze a general contest with n groups

unemployment dynamics in britain we examine the inter related dynamics of the unemployment flows and stock our model allows them to be linked through the standard accounting identity but also through behavioural relationships we find that for the uk the bulk of the correlation between duration and the unemployment stock arises from the dependence of duration on unemployment taking careful account of the inter temporal identity outflow shocks have contributed little to the evolution of unemployment since the late 1960s given that the correlation of duration and unemployment arises from the behavioural relationship we show that unemployment dynamics arise mostly from shocks to the inflow unemployment remains one of europe s more pressing economic and social problems as highlighted in the eu s lisbon declaration of 2000 a dynamic approach to unemployment starts from the recognition that unemployment is a stock and changes through shocks to the outflow and inflow the research and policy focus has generally been on the outflow process or equivalently unemployment duration a glance at figure 1 shows why this might be so it reveals a very strong co movement of the unemployment rate and the proportion of the unemployed out of work for a year or more analysts have used data like this to argue that the source of unemployment fluctuations has been changes in the outflow process 1 possibly as a consequence of this most policies directed at reducing unemployment focus on improving the search effectiveness and employability of the currently unemployed the unemployment flows and stock are related in quite complex ways and in this paper we focus on these inter related dynamics the model we use allows them to be linked in two ways first there is the simple accounting relationship whereby shocks to the flows accumulate in the stock second search and matching models suggest behavioural relationships of the flows depending on unemployment the presence of the nonlinear accounting identity in the model makes the analysis of the joint system problematic so we proceed sequentially investigating first one link and then the other we find that for the uk the bulk of the correlation between duration and the unemployment stock displayed in figure 1 arises from the dependence of the former on the latter we find a strong dependence of the outflow rate on unemployment taking careful account of the inter temporal identity on the other hand outflow shocks have contributed little to the evolution of unem

asymmetric rent seeking with more than two contestants this article considers a rent seeking model with n asymmetriccontestants each contestant may have a different valuation ofthe rent or a different relative ability to win the rent oneof the n contestants is selected as the winner based ontullock s probabilistic contest rule with constant returns toscale a pure strategy nash equilibrium solution is obtainedand its consequences are investigated

inducing patterns of correlation and substitution in repeated logit models of recreation demand repeated logit models are among the most commonly applied methods for modeling seasonal recreation demand in this article we examine the capabilities of the repeated nested logit and repeated mixed logit models to capture patterns of error correlation and demand substitution particular attention is paid to the use of the mixed logit framework to generalize the strong assumptions on correlation patterns across sites and choice occasions imbedded in the nested logit model we examine the implications for the range of price elasticities allowed in both models based on the implied correlation structures copyright 2002 oxford university press

a discrete choice model with endogenous attribute attendance abstract this paper develops a discrete choice model in which the decision to consider an attribute in the choice process is modelled endogenously in an application to patients choice of general practitioner it is found that the proposed model outperforms the standard logit model in terms of goodness of fit and produces substantially different estimates of willingness to pay

collective rent dissipation the theory of rent seeking was initiated by tullock 1967 1980 followed by krueger 1974 and posner 1975 and more recently extended in various directions by allard 1988 appelbaum and katz 1986a b c gradstein and nitzan 1989 hillman and katz 1984 1987 hillman and samet 1987 hillman and riley 1989 katz et al 1990 long and vousden 1987 ursprung 1990 and varian 1989 the purpose of this paper is to extend this theory by introducing the possibility of collective group rent seeking with voluntary individual decisions regarding their extent of participation in the collective rent seeking efforts

inequality and inefficiency in joint projects a group of agents voluntarily participates in a joint project in which efforts are not perfectly substitutable the output is divided according to some given vector of shares a share vector is unimprovable if no other share vector yields a higher sum of payoffs when the elasticity of substitution across efforts is two or lower only the perfectly equal share vector is unimprovable and all other vectors can be improved via lorenz domination for higher elasticities of substitution perfect equality is no longer unimprovable our results throw light on the connections between inequality and collective action

risk averse rent seeking with shared rents this paper presents a nash equilibrium model of rent seeking behavior in which risk averse players expend resources to obtain a share of a rent as for example in contests for import quota licences results are obtained relating the equilibrium level of lobbying effort by each player to the value of the rent in particular reduced individual lobbying effort is associated with higher rents contested if players are sufficiently risk averse the question of whether the value of rents is a good measure of the resource cost of rent seeking is also considered a simple approximation involving risk and risk aversion parameters is derived for the proportion of rents dissipated in long run equilibrium risk and risk aversion are seen to reduce the rent dissipation ratio below unity copyright 1987 by royal economic society

the importance of regret minimization in the choice for renewable energy programmes evidence from a discrete choice experiment abstract this study provides a methodologically rigorous attempt to disentangle the impact of various factors unobserved heterogeneity information and environmental attitudes on the inclination of individuals to exhibit either a utility maximization or a regret minimization behaviour in a discrete choice experiment for renewable energy programmes described by four attributes greenhouse gas emissions power outages employment in the energy sector and electricity bill we explore the ability of different models multinomial logit random parameters logit and hybrid latent class and of different choice paradigms utility maximization and regret minimization in explaining people s choices for renewable energy programmes the pure random regret random parameters logit model explains the choices of our respondents better than other models indicating that regret is an important choice paradigm and that choices for renewable energy programmes are mostly driven by regret rather than by rejoice in particular we find that our respondents choices are driven more by changes in greenhouse gas emissions than by reductions in power outages finally we find that changing the level of information to one attribute has no effect on choices and that being a member of an environmental organization makes a respondent more likely to be associated with the utility maximization choice framework

private information group contests best shot competition abstract we model competing groups when players values for winning are private information each group s performance equals the best effort best shot of its members and the group with the best performance wins the contest at the symmetric equilibrium of symmetric contests increasing the number of competing teams may increase or decrease each team s performance but it unambiguously increases the overall expected best shot depending on the elasticity of the distribution of players values individual team and contest performance may increase or decrease with team size considering just two competing groups that differ only in size we show members of the smaller group use the more aggressive strategy but depending on the nature of uncertainty either team may be more likely to win more generally when teams value cdfs differ increasing one team s size decreases increases that team s chance of winning if its value cdf is elastic inelastic

on the evolution of prize perceptions in contests abstract we apply an indirect evolutionary approach to players perceived prize valuations in contests evolution in finite populations leads to preferences that overstate the prize s material value and induce overexpenditure we establish an equivalence between evolutionarily stable strategies and the behavior induced by evolutionarily stable preferences

an approximate solution to rent seeking contests with private information abstract we propose an approximate solution to rent seeking contests in which participants have heterogeneous and private valuations the procedure only requires common knowledge about the mean of the distribution of valuations we obtain a closed form expression for an agent s level of investment and subject it to comparative statics analysis we then assess the performance of the model and find that the proposed solution provides a remarkably effective approximation of the optimal solution for a wide range of parameter specifications

asymmetric discouragement in asymmetric contests we provide new experimental evidence which suggests an asymmetric discouragement effect in lottery contests with heterogeneous abilities compared to a symmetric contest subjects invest less effort when facing a stronger opponent but they invest the same when facing a weaker opponent our results can be explained by a simple model of disappointment aversion

valuing indigenous cattle breeds in kenya an empirical comparison of stated and revealed preference value estimates abstract in this study we compare revealed and stated preference approaches to value traits of cattle in kenya the premise is that much can be learnt about non market values of indigenous animal genetic resources angr from the use of multi attribute stated preference methods if these compare well with revealed preference results the objective is to investigate the performance of choice experiments ces in maasai cattle trading by conducting an external test of preference consistency we compare value estimates for cattle attributes from ces data with those from hedonic analysis of actual transactions by the same population of traders in the same markets and over the same period if ces perform well they can be used to investigate values of those genetically determined livestock traits currently not prominent in pastoralists populations but desirable candidates for breeding or conservation programmes e g disease resistance the results indicate that ce estimates pass the external test and appear to be adequately precise in estimating values for cattle traits that are relevant in market transactions for maasai traders accounting for taste and variance heterogeneity does not change this conclusion ces may therefore be a promising tool for valuing phenotypic traits expressed by indigenous angr

between group contests over group specific public goods with within group fragmentation we model a contest between two groups of equal sized populations over the division of a group specific public good each group is fragmented into subgroups each subgroup allocates effort between production and contestation perfect coordination is assumed within subgroups but subgroups cannot coordinate with one another all subgroups choose effort allocations simultaneously we find that the group that is more internally fragmented receives the smaller share of the public good aggregate rent seeking increases when the dominant subgroups within both communities have larger population shares any unilateral increase in fragmentation within a group reduces conflict and increases the total income of its opponent strikingly the fragmenting community itself may however increase its total income as well even though its share of the public good declines hence a smaller share of public good provisioning cannot be used to infer a negative income effect on the losing community

group size collective action and complementarities in efforts we revisit the group size paradox in a model where two groups of different sizes compete for a prize exhibiting a varying degree of rivalry and where group effort is given by a ces function of individual efforts we show that the larger group can be more successful than the smaller group if the degree of complementarity is sufficiently high relative to the degree of rivalry of the prize

how do respondents process stated choice experiments attribute consideration under varying information load the popularity of stated choice sc experiments has produced many design strategies in which researchers use increasingly more complex choice settings to study choice behaviour when the amount of information to assess increases we wonder how an individual handles such information in making a choice defining the amount of information as the number of attributes associated with each choice set we investigate how this information is processed as we vary its complexity four ordered heterogeneous logit models are developed each for an sc design based on a fixed number of attributes in which the dependent variable defines the number of attributes that are ignored we find that the degree to which individuals ignore attributes is influenced by the dimensionality of the sc experiment the deviation of attribute levels from an experienced reference alternative the use of adding up attributes where feasible the number of choice sets evaluated and the personal income of the respondent the empirical evidence supports the view that individuals appear to adopt a range of coping strategies that are consistent with how they process information in real markets and that aligning choice complexity with the amount of information to process is potentially misleading relevancy is what matters copyright 2006 john wiley sons ltd

contests with group specific public goods and complementarities in efforts abstract this paper starts from the observation that in public goods group contests group impact can in general not be additively decomposed into some sum of functions of individual efforts we use a ces impact function to identify the main channels of influence of the elasticity of substitution on the behavior in and the outcome of such a contest we characterize the nash equilibria of this game and carry out comparative static exercises with respect to the elasticity of substitution among group members efforts if groups are homogeneous i e all group members have the same valuation and efficiency within the group the elasticity of substitution has no effect on the equilibrium for heterogeneous groups the higher the complementarity of efforts of that group the lower the divergence of efforts among group members and the lower the winning probability of that group this contradicts the common intuition that groups can improve their performance by solving the free rider problem via higher degrees of complementarity of efforts

mixed strategy play in single stage first price all pay auctions with symmetric players abstract we consider sealed bid first price all pay auctions with complete information discrete strategy space budget constraint and symmetric players and then construct the equilibrium solution in mixed strategies for both fixed and variable prizes the equilibrium solution yields predictions concerning the effects of group size and value of the prize that are tested experimentally the experimental results support equilibrium play on the aggregate but not individual level adaptive learning on the individual level accounts for the major trends in the aggregate expenditures over time

collective action and the group size paradox according to the olson paradox larger groups may be less successful than smaller groups in furthering their interests we address the issue in a model with three distinctive features explicit intergroup interaction collective prizes with a varying mix of public and private characteristics and nonlinear lobbying costs the interplay of these features leads to new results when the cost of lobbying has the elasticity of a quadratic function or higher larger groups are more effective no matter how private the prize with smaller elasticities a threshold degree of publicness is enough to overturn the olson argument and this threshold tends to zero as the elasticity approaches the value for a quadratic function we also demonstrate that these results are true irrespective of whether we examine group sizes over the cross section in some given equilibrium or changes in the size of a given group over different equilibria

revenge or continued attack and defense in defender attacker conflicts abstract existing literature has demonstrated that exacting revenge can have a self deterrence effect and a value of revenge effect the former means that each player will decrease effort when competing for a resource because of fear of a rival s revenge while the latter implies that each player will increase effort in the revenge period moreover the self deterrence effect could outweigh the value of revenge effect implying that revenge could be helpful in stabilizing conflicts a phenomenon known as the paradox of revenge we re examine the two effects and the paradox of revenge in defender attacker conflicts considering a scenario in which a defender and only the defender who was attacked in the first period takes revenge on the attacker in the subsequent period we demonstrate that whether or not these results hold depends on how much the defender values revenge and the difference between the two players efficiencies of effort more interestingly we show that a sufficiently large revenge value for the defender can deter an attack from the attacker in the first place

rent seeking and optimal regulation in replenishable resource industries in this paper wasteful rent seeking behaviour has been shown to have important implications for the determination of the welfare maximizing regulatory policies of replenishable natural resource industries in general the incorporation of wasteful rent seeking activity into the analysis leads to policies which suggest a greater level of industry output than has been advocated by tradition policies that do not take rent seeking into account our analysis therefore supports a more laissez faire policy than has been recommended in the literature

attending to the reasons for attribute non attendance in choice experiments this paper focuses on behavioural reasons underlying stated attribute non attendance in choice experiments in order to identify and incorporate procedures for dealing with heterogeneous attribute processing strategies we ask respondents follow up questions regarding their reasons for ignoring attributes based on these statements we conclude that the standard way of assigning a zero impact of ignored attributes on the likelihood is inappropriate we find that some respondents act in accordance with the passive bounded rationality assumption since they ignore an attribute simply because it does not affect their utility excluding these genuine zero preferences as the standard approach essentially does might bias results other respondents claim to have ignored attributes to simplify choices however we find that these respondents have actually not completely ignored attributes we argue along the rationally adaptive behavioural model that valid preference information may indeed be elicited in these cases and we illustrate how recoding of non attendance statements conditional on stated reasons may be a more appropriate solution than the current standard way of taking stated non attendance into account

efficient rents 1 rent seeking behavior in the long run we have analyzed long run behavior in rent seeking under several conditions and behavioral hypotheses the question of interest is whether or not the long run expenditures will exactly equal the value of the rents our results depend on the type of competitive response which is assumed to exist in the long run and on the r value governing the probability of winning

rent seeking for pure public goods in this paper we present a formal analysis of rent seeking for public goods by two or more groups with different numbers of individuals we begin by considering equally wealthy groups under risk neutrality a case which constitutes our basic model several surprising and interesting results emerge from the analysis of this basic case the problem is then extended to deal with a groups with different wealth levels and b risk aversion this last extension brings about a further crop of interesting and useful results

protest beliefs in contingent valuation explaining their motivation abstract the definition and treatment of protest responses in contingent valuation cv can have a significant influence on the estimated values of the good in question if these responses are censored in order to understand how protest responses are motivated in a cv about forest biodiversity in germany we used an item battery to identify respondents protest beliefs the items were measured for all respondents irrespective of their willingness to pay wtp in principle then a scale based on these beliefs is taken as a dependent variable of regression analyses in addition to environmental concern we used norms the warm glow of giving and dilemma concern as further explanatory variables the latter focuses on cooperation problems in protecting the environment our results show that protest beliefs are significantly influenced by the explanatory factors furthermore the protest beliefs themselves have a significant effect on the decision to be wtp as well as on the amount of money stated by those who are wtp the censoring of protest responses may therefore be indefensible

risk averse rent seekers and the social cost of monopoly power there is now quite general recognition that the social cost of monopoly power encompasses the resources expended by individuals seeking to become the beneficiaries of monopoly rents however since the activity of rent seeking is generally not observable direct estimates of resources expended in quests to acquire monopoly power are usually impossible to come by 1 as a consequence the indirect approach of taking the observed value of monopoly rents as indicative of the unobserved value of the resources expended in rent seeking is quite generally adopted in approaches to evaluation of the social cost of such activity

rent seeking with non identical sharing rules the primary object of this paper is to examine the role of differential sharing rules within a collective rent seeking setting on the possible non existence of nash equilibrium focusing on groups that distribute part of the rent equally among their members and the residual according to relative effort we show that in rent seeking societies applying the two polar sharing rules equilibrium never exists in the general case where groups apply different but not necessarily the polar sharing rules we study the relationship between group variability in distributing rents and the problem of non existence of equilibrium in the rent seeking game

reformulating the foundations of consumer choice theory and environmental valuation abstract the burgeoning field of environmental valuation has raised serious doubts about the fundamental axioms of consumer choice theory the general validity of the walrasian system and methodological individualism this paper examines these aspects of consumer choice theory paying particular attention to the pioneering contributions of georgescu roegen we argue that evidence from psychology game theory anthropology and contingent valuation surveys reveals a more complex pattern of decision making than that described by neoclassical utility theory we discuss the notions of the invariance of preferences non satiation the principle of complementarity lexicographic preferences and the hierarchy of wants with reference to environmental valuation we also discuss the notion of marginal utility of money the validity of the walrasian system and methodological individualism using scaling concept in hierarchy theory we then address the conflict between theory and reality by introducing a probabilistic binary choice scheme under uncertainty about environmental attributes we argue that these extensions are necessary to account for consumer choices revealed in environmental valuation surveys we conclude with the hope that a reformulation of consumer choice theory based on realistic models of human behavior can be the basis for a viable alternative to neoclassical welfare economics

markets for ideas prize structure entry limits and the design of ideation contests contests are a popular mechanism for the procurement of innovation in marketing design and other creative industries firms use freelance marketplaces to organize contests and obtain high quality ideas for ads new products and even business strategies from participants a central question faced by contest sponsors is how to appropriately structure prizes and entry regulations i develop an empirical model of idea generation ideation contests and investigate the impact of the number of prizes prize amount and submission limit on participation and quality outcomes using data from a popular marketing ideation platform the model explains participant submission decisions jury ratings and sponsor rankings of winning submissions counterfactuals reveal the impact of design parameters on outcomes and provide guidance for the optimal design of ideation contests and platforms

dealing with ignored attributes in choice experiments on valuation of sweden s environmental quality objectives using a choice experiment this paper investigates how swedish citizens value three environmental quality objectives in addition a follow up question is used to investigate whether respondents ignored any attributes when responding the resulting information is used in model estimation by restricting the individual parameters for the ignored attributes to zero when taking the shares of respondents who took both the environmental and the cost attributes 52 69 of the respondents into account then the wtp for each attribute changes if the respondents who ignored the attributes have a zero wtp at the same time we find evidence that not all respondents who claimed to have ignored an attribute really did however the most commonly ignored non monetary attributes always have the lowest rankings in terms of wtp across all three environmental objectives thus our results show that instead of ignoring attributes completely respondents seem to put less weight on the attributes they claimed to have ignored

learning design contingent valuation ldcv noaa guidelines preference learning and coherent arbitrariness we extend the contingent valuation cv method to test three differing conceptions of individuals preferences as either i a priori well formed or readily divined and revealed through a single dichotomous choice question as per the noaa cv guidelines k arrow r solow p r portney e e leamer r radner h schuman report of the noaa panel on contingent valuation fed reg 58 1993 4601 4614 ii learned or discovered through a process of repetition and experience j a list does market experience eliminate market anomalies q j econ 2003 41 72 c r plott rational individual behaviour in markets and social choice processes the discovered preference hypothesis in k arrow e colombatto m perleman c schmidt eds rational foundations of economic behaviour macmillan london st martin s new york 1996 pp 225 250 iii internally coherent but strongly influenced by some initial arbitrary anchor d ariely g loewenstein d prelec coherent arbitrariness stable demand curves without stable preferences q j econ 118 1 2003 73 105 findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning in doing so we show that such a learning design cv method overturns the stylised facts of bias and anchoring within the double bound dichotomous choice elicitation format

collective contests for commons and club goods abstract this paper focuses on collective contests for commons and club goods our main objective is to examine in this context the effect of group size on its performance the main results specify conditions for the existence non existence of the group size paradox namely the situation where a larger group is less more effective in pursuing its interest because of despite the combined effect of the incentives that result in the free riding problem and the tragedy of the commons the paper also explains under what circumstances there exists a bias towards excessive or inadequate winning group size finally it examines the effect of restricted excludability of the commons good within the winning group on the relationship between group size and its winning probability

skew and attribute non attendance within the bayesian mixed logit model abstract we investigate non attendance to choice set attributes and the accommodation of preference heterogeneity within the mixed logit model we propose a generalisation of the mixed logit enabling the degree of skew of marginal utility distributions to be estimated the implementation is bayesian with the marginal likelihood used as an arbiter of model performance we find strong evidence of skew in the distributions of marginal utilities for most attributes models incorporating skew are preferred in all cases the irrelevance of an attribute to significant numbers of respondents is a possible cause of such skew we test alternative empirical accommodations of self reported attribute non attendance ana and continue to find strong evidence of skew in the distributions of marginal utilities even having accounted for ana we find that contrary to some recent findings respondents who report having ignored an attribute typically do indeed have a zero marginal utility for that attribute

group contests with internal conflict and power asymmetry we investigate simultaneous inter and intra group conflict in the shadow of within group power asymmetry and complementarity in members group conflict efforts a more symmetric group faces a higher degree of internal conflict and might expend more effort in external conflict when the group conflict effort technology is highly complementary depending on the degree of complementarity the stronger player s relative contribution to external conflict might be higher in a more asymmetric group and as a result it is possible for the weaker player to earn a higher payoff in the absence of any complementarity the rent dissipation is non monotonic with the within group power asymmetry

designing choice sets for stated preference methods the effects of complexity on choice consistency abstract we vary the complexity of choice sets used in stated preference methods to evaluate the impact on choice consistency we define five measures of complexity that capture either the amount of information or the correlational structure of information in a choice set using these measures as randomly assigned treatments in a large experiment we analyze the consistency of respondents choices using a heteroskedastic multinomial logit model we find that i all of our measures of choice set complexity affect choice consistency ii changes in the correlational structure of information have the largest impact on choice consistency and iii choice complexity significantly distorts welfare estimates our results confirm economists initial worry that moving from contingent valuation to conjoint methods will increase complexity induced choice inconsistency however our analysis also shows that these negative impacts may be mitigated if precautions are taken at the design and estimation stages of stated preference methods

top guns may not fire best shot group contests with group specific public good prizes we analyze a group contest in which n groups compete to win a group specific public good prize group sizes can be different and any player may value the prize differently within and across groups players exert costly efforts simultaneously and independently only the highest effort the best shot within each group represents the group effort that determines the winning group we fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort there always exists an equilibrium in which only the highest value player in each active group exerts strictly positive effort however perverse equilibria may exist in which the highest value players completely free ride on others by exerting no effort we provide conditions under which the set of equilibria can be restricted and discuss contest design implications

task divisions in teams with complementary tasks abstract a team leader and a team follower non cooperatively produce a team specific public good out of two complementary tasks both team members are identically productive and can contribute to both tasks by moving first the team leader effectively determines the division of the tasks in the team we show that the existence of multiple but finitely many types of task divisions is associated with a non convex leader s budget constraint non convexity generates discontinuities and non monotonicities in the equilibrium provision of the good and also in the follower s utility if incomes are redistributed within the team non monotonicity of the follower s utility motivates the follower to give a cash transfer to the leader having received the cash transfer the leader adopts a task division that compensates the contributions of the follower hence we observe a non cooperative gift exchange with a monetary gift to the leader and a subsequent non monetary reward to the follower through a lighter task allocation these gift exchanges disappear in the presence of infinitely many types of task divisions generated by a continuum of complementary tasks

activity and inactivity in a rent seeking contest with private information we consider a rent seeking contest in which one player has private information about his own valuation of the prize this valuation may be either high or low all other players have a known and identical valuation of the prize we present necessary and sufficient conditions under which the privately informed player exerts a positive or zero equilibrium effort

protest responses in contingent valuation a significant number of respondents to contingent valuation surveys tend to either state a zero bid or refuse to state a bid at all for reasons associated with the process of valuation these protest responses are routinely removed from contingent valuation samples because it is assumed that they are not indicative of respondents true values the censoring of protest responses has led to the emergence of a definitional controversy one view is that the definition of protest responses and the rules for censoring them are dependent on whether the practitioner conceives of the contingent valuation survey as a market or as a referendum however what is not acknowledged is the possibility that protest responses and their meaning may vary according to the type of good being valued the elicitation format and the interaction between these elements and external factors this potential renders the development of unambiguous rules for censoring protest responses difficult moreover when willingness to pay is viewed as a behavioural intention it becomes important to determine what the responses actually mean this approach does not assume an interpretative position a priori against which the responses should be judged but seeks to inform an existing understanding which is inadequate

monitoring choice task attribute attendance in nonmarket valuation of multiple park management services does it matter land management in alpine parks provides multifunctional services to separate groups of users choice experiments can be used to derive estimates of value for different management attri butes however little research has been conducted on how frequently respondents ignore attributes used to describe policy management scenarios we fill this gap using an approach that identifies and compares both serial and choice task attribute nonattendance addressing five different visitor types our results indicate that accounting for choice task nonatten dance significantly improves model fit and yield estimates of marginal willingness to pay with a more plausible pattern of signs and greater efficiency jel q24 q51 i introduction the effects of park management policies on outdoor recreation are increasingly coming under public scrutiny alpine park land is among the most valuable land in terms of outdoor recreation park manage ment decisions are often controversial be cause of differences between objectives pursued by conservationists and the tourist industry parkland management agencies find it increasingly difficult to fund all the services needed to facilitate the ever broad ening variety of outdoor recreation activi ties this is further exacerbated by the increasing expectations for high quality recreational experiences by a population of recreationists with a heightened sensitivity to environmental and conservation issues such a situation widens the scope for multiattribute nonmarket valuation meth ods especially for those methods capable of capturing and modeling the preferences of heterogeneous visitors who seek to pursue a variety of activities in the land under study our research reports the results of a study designed to address attribute nonattendance henceforth abbreviated as an a which despite being quite a common decision heuristic has only recently begun to be explored by analysts with this decision heuristic respondents ignore some of the described attributes in their evaluation of alternatives within a given choice task they hence act as if a zero weight were assigned to the ignored attributes in the utility of the respective alternatives we study this issue by using a well known statistical model of discrete choice the multinomial logit mnl model this random utility model is often used for the purpose of multi attribute nonmarket valuation but the effects of accounting for an a are still rela tively unexplored information on an a is commonly collected by questioning each respondent at the end of the sequence of choice tasks respondents are asked to list those attributes that they feel they have

rent seeking with asymmetric valuations this paper analyzes tullock s rent seeking game with asymmetric valuations for a variable range of the returns to scale parameter a necessary and sufficient condition for a unique pure strategy nash equilibrium is established equilibrium effort and expected profits are determined and subjected to comparative statics analysis increasing the underdog s valuation induces both players to increase their efforts increasing the favorite s valuation increases his effort but decreases the effort of the underdog expected profits increase with a player s valuation but decreases with the valuation of the competitor the impact of the returns to scale parameter is also analyzed

single and double elimination all pay tournaments abstract tournaments consisting of iterative matches are a common mechanism for determining how to allocate a prize for this reason it is important to understand the behavioral as well as the theoretical properties of different tournament structures given that laboratory experiments have consistently found high levels of overbidding in contests one might suspect that double elimination tournaments would generate substantially more total investment than single elimination tournaments despite the two types of tournaments generating theoretically equivalent expected aggregate investment this paper reports a set of laboratory experiments designed to test this comparison the results indicate that aggregate investment is similar between the two tournaments despite behavioral differences in bidding strategies

are fast responses more random testing the effect of response time on scale in an online choice experiment scepticism over stated preference surveys conducted online revolves around the concerns over professional respondents who might rush through the questionnaire without sufficiently considering the information provided to gain insight on the validity of this phenomenon and test the effect of response time on choice randomness this study makes use of a recently conducted choice experiment survey on ecological and amenity effects of an offshore windfarm in the uk the positive relationship between self rated and inferred attribute attendance and response time is taken as evidence for a link between response time and cognitive effort subsequently the generalised multinomial logit model is employed to test the effect of response time on scale which indicates the weight of the deterministic relative to the error component in the random utility model results show that longer response time increases scale i e decreases choice randomness this positive scale effect of response time is further found to be non linear and wear off at some point beyond which extreme response time decreases scale while response time does not systematically affect welfare estimates higher response time increases the precision of such estimates these effects persist when self reported choice certainty is controlled for implications of the results for online stated preference surveys and further research are discussed

inferring attribute non attendance from discrete choice experiments implications for benefit transfer typical convergent validity tests of benefit transfer based on stated preference data assume that willingness to pay wtp estimates have been accurately measured and that differences in wtp arise from differences in observable and unobservable characteristics between the study and the policy sites in this paper we conduct a convergent validity test assuming equality of underlying preferences but allow for the possibility that transfer errors arise from differences in the way that respondents process information in the preference elicitation tasks using data from an identical survey instrument applied to the population of two river basins in spain we obtain marginal and total wtp estimates for ecological improvements of water bodies and the corresponding transfer errors across sites results of equality constrained latent class eclc models that infer attribute non attendance an a are compared to results from mixed logit mxl models in wtp space we find large absolute and relative differences in marginal and total wtp between sites for the mxl models and significantly reduced transfer errors for the eclc models this paper therefore provides further evidence that an a can significantly affect environmental values derived from attribute based stated preference methods and is the first to investigate the implications for benefit transfer

group specific public goods orchestration of interest groups with free riding we consider a situation in which two groups contest group specific public goods each member of the group may have a different valuation of the prize our model can be interpreted as the contestants cost of lobbying efforts being non linear or the returns to their efforts being decreasing we show that the level of free riding depends on the return of the investment we consider the situation under which one group initiates a contest to which different individuals and or groups can be added the question we pose is what is the optimal structure of additional groups

the determinants of equilibrium unemployment in britain a reply in my original paper nickell i982 r analyse a theoretical model concerned with flows into and out of unemployment consequent on this analysis i estimate equations which explain the quarterly inflow and outflow rates i e inflow employment and outflow unemployment in the first section of his comments price i985 price rightly points out that such rates cannot be thought of as quarterly probabilities because of the length of the time interval involved on the other hand if it is thought to be helpful the probability interpretation could be sustained to a high degree of approximation if one thought of the quarterly rates as the average daily probability times the number of days in a quarter however since this issue is of no significance vis a vis the original paper i shall turn to the second section of price s comment which deals with my results his first point is concerned with the degree of serial correlation in the residuals in my paper i report durbin watson and box pierce tests the former being a small sample test the latter an asymptotic test neither test rejects the null in either equation price reports that large sample versions of the lm test reject the null in both equations with the outflow rate equation coming off worst the large sample lm test for nth order autocorrelation is based on the r2 from a regression of the fitted residuals on n lags of itself plus all the regressors in the outflow equation there are i5 regressors and 44 observations in order to include n lags on the residuals n observations must be dropped and the regression used to generate the lm test then includes i5 n variables on the right and uses 44n observations the number of degrees of freedom remaining is thus 292n so even with the test for first order serial correlation we have only 27 degrees of freedom remaining and when we arrive at twelfth order serial correlation we are down to 5 degrees of freedom this might explain why the first order lm test is somewhat at odds with the durbinwatson test which is after all a perfectly reasonable small sample test of serial correlation in this particular equation so i do not find this to be convincing evidence that the model originally reported is misspecified however the fact that price finds evidence of parameter instability across the middle of the sample is a more serious matter this is always a potential problem with short samples and lots of regressors since the equations are more or less bound to be overfitted i am guilty as charged on this count the next section of price s comment is concerned for the most part with the outflow rate equation in essence he objects to my running a regression to explain the log outflow rate log ot ut 0 outflow u unemployment in spite of the fact that it is a natural consequence of the theory to back up his i96

ambiguous political power and contest efforts 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