Two-Stage Rent-Seeking Contests with Carryovers

We examine a two-stage contest in which players in twogroups compete noncooperatively to win a rent. In thefirst stage, each group selects a finalist. The twofinalists compete for the rent in the second stage.First-stage efforts are carried over to the secondstage in the sense that they are partly effective inthe second stage as well. We show the following. Inthe case of player-specific carryovers, therent-dissipation rate increases in the carryover rate.With the carryover rate equal to one, the rent isfully dissipated. In the case of group-specificcarryovers, however, the rent-dissipation rate isindependent of the carryover rate.