Ambiguous political power and contest efforts

Gil Epstein, Igal Milchtaich, Shmuel Nitzan and Mordechai Schwarz

Public Choice, 2007, vol. 132, issue 1, 113-123

Abstract: 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%. Copyright Springer Science+Business Media, LLC 2007

Keywords: Contests; Incomplete information; lobbying; transparency (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11127-006-9137-6 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:132:y:2007:i:1:p:113-123

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

DOI: 10.1007/s11127-006-9137-6

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().