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Applied Economics Letters Volume 13, 2006 - Issue 13
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Original Articles

Contests with interdependent preferences

Sherrill Shaffer Department of Economics and Finance, University of Wyoming 1000 E. University Ave., Laramie, WY 82071, USA E-mail: [email protected]
Pages 877-880 | Published online: 17 Feb 2007
 
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Abstract

Relaxing the common assumption of purely self-interested preferences in contests, it is shown that altruism (bilateral or unilateral) reduces equilibrium rent-seeking effort. The effects on net payoffs are more complex. Strategic interdependence is possible, but the symmetric equilibrium is pure self-interest.

Acknowledgements

The author is grateful for helpful comments from Jay Shogren.

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