Investment in the Absence of Property Rights: The Role of Incumbency Advantages

23 Pages Posted: 27 Nov 2001

See all articles by Kai A. Konrad

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

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Date Written: November 2001

Abstract

In many situations the individuals who can generate some output must enter a contest for appropriating this output. This Paper analyses the investment incentives of such agents and the role of incumbency advantages in the contest. Depending on the advantages, an increase in the productivity of the investment can decrease or increase the amount of investment. The results are applied to autocrats' investment behaviour and job specific investment in organizations.

Keywords: Investment, endogenous property rights, contests, incumbency advantage, proprietry states

JEL Classification: D23, D72, D74, H54, O10, P16

Suggested Citation

Konrad, Kai A., Investment in the Absence of Property Rights: The Role of Incumbency Advantages (November 2001). CEPR Discussion Paper No. 3050. Available at SSRN: https://ssrn.com/abstract=291879

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

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Centre for Economic Policy Research (CEPR)

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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IZA Institute of Labor Economics

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