Document Type
Article
Publication Date
1-2007
Department 1
Economics
Abstract
This paper presents a two-stage team rent-seeking model with a contest prize that is not excludable among winning team members. When early effort is a perfect substitute for late effort, early actors can free ride on their late-moving teammates. However, when early and late efforts are complements, all team members exert positive effort levels. Asymmetries in early effort reduce effort choices for all late movers. The theory is tested with laboratory experimental methods. Although subjects overinvest relative to the Nash equilibrium in all treatments, chosen effort levels provide limited support for the model. Early movers exerted higher effort in the complement treatment, and second-stage effort choices were broadly consistent with best response functions. Surprisingly, in both single-shot and repeated play environments, early movers in the substitute treatment did not free ride, choosing effort levels similar to those of late movers. [excerpt]
Copyright Note
This is the publisher's version of the work. This publication appears in Gettysburg College's institutional repository by permission of the copyright owner for personal use, not for redistribution.
Recommended Citation
Cadigan, John J. "Two-Stage Team Rent-Seeking: Experimental Analysis." Southern Economic Journal 74.2 (January 2007), 85-103.
Required Publisher's Statement
Original version is available from the publisher at: http://journal.southerneconomic.org/loi/soec