The Politics of Randomness

21 Pages Posted: 14 Nov 2002

See all articles by Gil S. Epstein

Gil S. Epstein

Bar-Ilan University - Department of Economics; IZA Institute of Labor Economics; University College London - CReAM - Centre for Research and Analysis of Migration

Shmuel Nitzan

Bar-Ilan University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 2002

Abstract

The main drawback of the public-policy contest is that the notion of contest success function, a crucial component of the contest model, does not have micro-foundations and, therefore, the random behavior of the government seems ad-hoc. In the present paper we propose a partial micro-foundation for the public-policy contest. The possible rationalization of random government behavior is illustrated in the case of the all-pay auction and Tullock's lottery logit functions. We also clarify how stake asymmetry, lobbying-skill asymmetry and return to lobbying effort determine the relative desirability, from the government's point of view, of these CSFs.

Keywords: Interest Groups, Policy Makers, Lobbying, Public-policy Contests, Contest Success Function, Rationalization of Random Government's Behavior

JEL Classification: D72, D6

Suggested Citation

Epstein, Gil S. and Nitzan, Shmuel, The Politics of Randomness (October 2002). CESifo Working Paper Series No. 803. Available at SSRN: https://ssrn.com/abstract=349923

Gil S. Epstein

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+972 3 531 8937 (Phone)
+972 3 535 3180 (Fax)

HOME PAGE: http://faculty.biu.ac.il/~epsteig/

IZA Institute of Labor Economics ( email )

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Germany

University College London - CReAM - Centre for Research and Analysis of Migration ( email )

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London, WC1H 0AX
United Kingdom

Shmuel Nitzan (Contact Author)

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+972.3.531.8930 (Phone)
+972.3.535.3180 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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