Multi-Period Rent-Seeking Contests with Carryover:
Theory and Experimental Evidence

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.