Recent research has demonstrated that while government expenditures are countercyclical inmost industrialized countries, they tend to be procyclical in developing countries. We develop adynamic political economy model to explain this phenomenon. In the model, public expendituresprovide insurance...

Both conventional wisdom and leading academic research view pork barrel spendingas antithetical to responsible policymaking in times of crisis. In this paper we presentan alternative view. When agents are heterogeneous in their ideology and in theirinformation about the economic situation,...

The key element of models of contest is the Contest Success Function (CSF) which specifiesthe winning probabilities of agents. The existing axiomatizations of CSFs assume thatcontestants can make only one type of investment. This paper generalizes these axiomatizationsto the case where each...

We show that the presence of loss aversion on the part of participantsin a Tullock imperfectly discriminating contest will significantlyreduce the proportion of the rent dissipated in the form of resourcesused up in the competition for that rent...

This paper considers the extent to which expenditure by contestants inimperfectly discriminating rent-seeking contests dissipates all or only partof the rent. In particular, we investigate strategic effects, technologicaleffects and asymmetry under an assumption of diminishing returns to...

Noncooperative games in which each player’s payo¤ function depends on anadditively separable function of every player’s choice variable may be transformedinto an aggregative game, which may be analysed using the conceptof ‘share functions’. The resulting approach avoids the...

The rent-seeking model of Tullock (1980) has stimulated a large literature on rent-seekingcontests, of which Hillman (1989) and Nitzan (1994) provide useful surveys. AlthoughTullock's 'winner take all' model has been adapted and extended in numerous ways, thereremain fundamental modeling issues,...

The paper studies the impact of social networks on the level of within industry competition. Specifically, we examine the effect of social relations between CEOs on the propensity to cooperate with the antitrust agency during a cartel investigation.We use cartel data based on decisions by the...