An Experiment on Sequential Rent-Seeking

Posted: 22 Sep 2001

See all articles by Joachim Weimann

Joachim Weimann

Otto-von-Guericke-Universit├Ąt Magdeburg - Institute of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)

Chun-Lei Yang

Carsten Vogt

Zentrum fuer EuropSische Wirtschaftsforschung (ZEW Centre for European Economic Research), Environmental & Resource Economics

Abstract

In an experiment on sequential rent seeking, we find that the theoretically predicted first-mover advantage does not exist empirically. Rather, a second-mover advantage can be observed. Though the subgame perfect equilibrium can not prevail in experiment, individual behavior is highly reasonable nevertheless, such that subjects appear to play a reduced form of the original game. We also observe that the efficient fair outcome can not be achieved because of the exploitation opportunity for the second mover. The observed behavior is quite different from that in ultimatum and trust game experiments.

Keyword(s): Rent-seeking, Experiment, Reciprocity, Fairness, Exploitation

JEL Classification: C91, C92, D72

Suggested Citation

Weimann, Joachim and Yang, Chun-Lei and Vogt, Carsten, An Experiment on Sequential Rent-Seeking. Available at SSRN: https://ssrn.com/abstract=251353

Joachim Weimann (Contact Author)

Otto-von-Guericke-Universit├Ąt Magdeburg - Institute of Economics and Business Administration ( email )

Universitaetsplatz 2
Magdeburg, 39016
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Carsten Vogt

Zentrum fuer EuropSische Wirtschaftsforschung (ZEW Centre for European Economic Research), Environmental & Resource Economics ( email )

Eco-management
D-68161 Mannheim
Germany
+49 6211235200 (Phone)
+49 6211235226 (Fax)

No contact information is available for Chun-Lei Yang

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