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Delegation with multiple instruments in a rent-seeking contest
Authors:Lambert Schoonbeek
Affiliation:1. Department of Economics, University of Groningen, P.O. Box 800, 9700, AV, Groningen, The Netherlands
Abstract:We consider delegation in a rent-seeking contest with two players, where delegates have more instruments at their disposal than the main players. We endogenize both the decision to hire a delegate and the contingent fee offered to the delegates. We characterize the situations when either no, one or two players hire a delegate in equilibrium. We show that the decision to hire a delegate depends in a non-monotonic way on the size of the contested prize.
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