Pamela Schmitt
United States Naval Academy
Department of Economics
Robert Shupp
Ball State University
Department of Economics
Kurtis Swope
United States Naval Academy
Department of Economics
John Cadigan
American University
Department of Public Administration
Abstract
The majority of theoretical and experimental research stemming from
Tullock’s (1980) model of rent-seeking considers static, single-period
contests. This paper contributes to a growing body of research on multi-period
rent-seeking contests by developing and experimentally testing a model
in which a player’s effort affects the probably of winning a contest in
both the current and future periods. Theory predicts that rent-seeking
effort will be shifted forward from later to earlier periods, with no change
in overall rent-seeking expenditures relative to the static contest. Experimental
results indicate a significant shift forward when “carryover” is present
and that the amount shifted is directly related to the carryover rate.
Finally, although experimental expenditures are greater than the equilibrium
predictions, overall rent-seeking effort in the carryover contests is lower
than in similar static contests.