Learning the Structure of a Simple Rent-Seeking Game.

This paper considers a form of the Tullock imperfectly discriminating rent-seeking game in which the contestants are uncertain about the value of a bias parameter is the probability of winning function. Beliefs about this unknown parameter are not constrained to be static; the author considers two methods by which the players' prior beliefs on this parameter can be updated. First, he allows for information to emerge by considering the case in which the game is played twice, with the outcome of the first game known before the second begins. The identity of the winner of the first contest represents information which emerges endogenously that can be used to revise beliefs on the unknown bias parameter. Second, information can be produced outside of the model by an external agency; this gives rise to exogenous learning. The author considers the consequences for rent-seeking in each of these two cases. Copyright 1997 by Kluwer Academic Publishers