Two-Dimensional Effort in Patent-Race Games and Rent-Seeking Contests: The Case of Telephony

Games 2014, 5, 116-126; doi:10.3390/g5020116

11 Pages Posted: 15 Apr 2019

See all articles by João Ricardo Faria

João Ricardo Faria

Florida Atlantic University

Franklin G. Mixon Jr.

Columbus State University

Steven B. Caudill

Auburn University - Department of Economics

Samantha Wineke

affiliation not provided to SSRN

Date Written: March 19, 2014

Abstract

Using the political-economic history of the development of telephony during the 1870s as a backdrop, this paper studies a two-player Tullock contest that includes both research effort (R&D) and legal effort (i.e., rent-seeking effort). The two types of efforts complement each other and positively influence the payoff of the contest. We assume that legal effort affects the prize value, increasing the winner’s prospective rents, and research effort impacts the probability of winning the contest. The results of the model break new ground in showing that research effort is a function of legal effort, wherein research effort increases with rent-seeking effort. The model also shows the existence of a strategic equivalence between rent seeking and patent races.

Keywords: rent-seeking contests; patent-race games; simultaneous invention; telephony development

JEL Classification: C70; D72; L12; L96

Suggested Citation

Faria, Joao Ricardo and Mixon Jr., Franklin G. and Caudill, Steven B. and Wineke, Samantha, Two-Dimensional Effort in Patent-Race Games and Rent-Seeking Contests: The Case of Telephony (March 19, 2014). Games 2014, 5, 116-126; doi:10.3390/g5020116, Available at SSRN: https://ssrn.com/abstract=3355757

Joao Ricardo Faria (Contact Author)

Florida Atlantic University ( email )

Boca Raton, FL 33431
United States

Franklin G. Mixon Jr.

Columbus State University ( email )

Columbus, GA 31907-5645
United States

Steven B. Caudill

Auburn University - Department of Economics ( email )

415 W. Magnolia
Auburn, AL 36849-5242
United States
334-844-2907 (Phone)

Samantha Wineke

affiliation not provided to SSRN

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