Contests & Conflict | 07.12.2022 | 18:00
Internal versus external rent-seeking with in-group inequality and public good provision

Referent: Indraneel Dasgupta

Date & Time: Los Angeles (9 am), Cincinnati (12 pm), Bath (5 pm), Munich (6 pm), Beijing (December 8, 1 am), Singapore (December 8, 1 am), Sydney (December 8, 4 am)

Indraneel Dasgupta will present the paper titled "Internal versus external rent-seeking with in-group inequality and public good provision" (joint work with Dripto Bakshi).

This talk is part of the Global Seminar on Contests & Conflict, a bi-weekly online seminar series with researchers from across the world. You can sign up to the Global Network to get information and invitations (including the Zoom Link for each event) about the Global Seminar hereMax-Planck-Institut für Steuerrecht und Öffentliche Finanzen: Global Seminar on Contests & Conflict (mpg.de).

Abstract of the Paper:
We examine how inequality in the endowment of secure wealth, mediated through voluntary public good provision, affects rent-seeking within and between groups.  We model a scenario where two communities, each internally differentiated into rich, intermediate and poor segments, contest one another for the division of some rent.  Any rent accruing to a community is distributed internally according to another, simultaneous, contest.  Individuals first decide how much of their endowments to allocate to the two contests.  They subsequently decide how to allocate their remaining wealth and rental income between private consumption and a community-specific public good.  We find that greater endowment inequality among the non-rich, both within and across communities, aggravates inter-group rent-seeking.  Within-group rent-seeking may rise as well.  In contrast, higher such inequality between the rich and others within a community depresses between-group conflict.  Within-group conflict may fall as well.  Better-endowed individuals are more successful in the internal conflict, while better-endowed groups are more successful in the external conflict. 
 

Chair: Subhasish Chowdhury, Co-Chair: Kai A. Konrad

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