WZB Markets and Politics Working Paper No. SP II 2010-10
24 Pages Posted: 25 Oct 2010
Date Written: October 22, 2010
Considering several main types of dynamic contests (the race, the tug-of-war, elimination contests and iterated incumbency fights) we identify a common pattern: the discouragement effect. This effect explains why the sum of rentseeking efforts often falls considerably short of the prize that is at stake. It may cause violent conflict in early rounds, but may also lead to long periods of peaceful interaction.
Keywords: Contest, dynamic conflict, discouragement effect, race, tug-of-war, elimination contest, iterated incumbency fight
JEL Classification: D71, D74
Suggested Citation: Suggested Citation