Download this Paper Open PDF in Browser

Sorting in Iterated Incumbency Contests

25 Pages Posted: 3 Aug 2016 Last revised: 24 Sep 2017

Samuel Häfner

University of Basel

Georg Nöldeke

University of Basel

Date Written: September 24, 2017

Abstract

This paper analyzes incumbency contests in a large population setting. Incumbents repeatedly face different challengers, holding on to their positions until defeated in a contest. Defeated incumbents turn into challengers until they win a contest against an incumbent, thereby regaining an incumbency position. Individuals are heterogeneous as regards their payoffs from being incumbent. We consider steady-state equilibria and study how and to which extent individuals sort into the incumbency positions depending on their type. In particular, we identify sufficient conditions for positive sorting, meaning that types with higher incumbency payoffs are overrepresented among the incumbents, and show that negative rather than positive sorting may also arise in equilibrium when these conditions are violated. Further results show how incumbency rents, surplus, and sorting are affected by the frequency at which incumbency is contested.

Keywords: Contests, Sorting, Incumbency Rents, Steady-State Equilibrium

JEL Classification: C72, D72, D74

Suggested Citation

Häfner, Samuel and Nöldeke, Georg, Sorting in Iterated Incumbency Contests (September 24, 2017). Available at SSRN: https://ssrn.com/abstract=2817250 or http://dx.doi.org/10.2139/ssrn.2817250

Samuel Häfner

University of Basel ( email )

Basel
Switzerland

Georg Nöldeke (Contact Author)

University of Basel ( email )

Peter-Merian-Weg 6
Basel, 4003
Switzerland

Paper statistics

Downloads
30
Abstract Views
223