The 2002 Winter Olympics scandal: rent-seeking and committees

In the wake of a judging controversy at the Winter 2002 Olympic games, the governing council of the International Skating Union scrapped its judging system, replacing it with a new system which uses scores from only some of the judges, selected randomly. This means that the composition of the awarding committee is unknown. I examine rent-seeking expenditures when the composition of the committee is unknown relative to the case when it is known. When the composition of the committee is unknown, I find that rent-seeking expenditures directed towards each committee member may fall but aggregate rent-seeking expenditures will not fall. I find the counter-intuitive result that there may be no change in the rent-seeking effort directed at each committee member, even if it is known that some of the members will not be part of the final awarding committee. The results hinge on whether there is full rent dissipation or rent under-dissipation when the composition of the committee is known.     

Incomplete property rights and overinvestment

I consider a model in which an asset owner must decide how much to invest in his asset mindful of the fact that an encroacher??s valuation of the asset is increasing in the asset owner??s investment. Due to incomplete property rights, the encroacher and asset owner engage in a contest over the control of the asset after investment has taken place. A standard result is that the asset owner will underinvest in the asset relative to the first-best level of investment when property rights are complete. Contrary to this standard result, I find that when the interaction between the asset owner and the encroacher is infinitely repeated and the encroacher has some bargaining power over the size of the transfer from the asset owner to him, then there is a cooperative equilibrium in which the asset owner finds it optimal to overinvest in the asset when property rights are incomplete relative to the first-best level of investment when property rights are complete. Overinvestment is used to induce cooperation. However, this result depends on the encroacher??s bargaining power or, more generally, whether the transfer is an increasing function of investment.     

Sabotaging Potential Rivals

This paper studies sabotage in a contest with non-identical players. Unlike previous papers, we consider sabotage in an elimination contest and allow contestants to sabotage a potential or future rival. It turns out that for a certain seeding of players there is a pure-strategy equilibrium in which only the most able contestant engages in sabotage while less able contestants do not. The most able contestant may therefore prefer a situation where sabotage is allowed to one where sabotage is not allowed. For another seeding of players, there is a unique equilibrium in which none of the players invests in sabotage.     

CITATIONS AND INCENTIVES IN ACADEMIC CONTESTS

I consider a contest between scholars on the basis of three popular indices of citation. There exist equilibria in which there are more and better-quality papers in the total citations contest than in the h-index contest. In some cases, the total citations contest yields the same quality of papers but more papers than the Euclidean contest. As the cost of writing a paper increases,the h-index is inferior to the total citations index in both the quality and quantity of papers. This result is partly driven by how the number of papers constrains how the h-index counts citations. (JEL D72)     

The jackknife procedure for the probabilities of misclassification

Seven estimators for the probabilities of misclassifi-cation associated with the linear discriminant function are considered. Four of them are known in the literature. The remaining three are constructed through the Jackknife Pro-cedure. An empirical investigation is conducted to evalu-ate the relative merits of these estimators. Summary of the results is presented.     

Incomplete property rights, redistribution, and welfare

In a world where the private protection of property is costly, government redistribution can lead to an increase in aggregate output. This result is not new. The novelty of this paper lies in specifying the conditions under which this efficiency-enhancing redistribution improves everyone’s welfare including the welfare of those whose labor finances the redistributive program (i.e., the rich) and how this is affected by the protection of property rights. The state may directly enhance economic rights through investments in security and the protection of property or it may indirectly do so through the redistribution of income. Under certain conditions, redistribution becomes desirable in situations where the state has exhausted its ability to enhance efficiency through the direct enforcement of property rights. In this case, redistribution can make all members of a society better off. Specifically, this occurs when the cost of predation is sufficiently low and the technology of private protection of property rights is sufficiently weak. The adverse effects of redistribution may be the consequence but not the cause of state failure. The real cause is a corrupt and inept state. My thanks are due to an anonymous referee and Zane Spindler for very helpful and critical comments. I thank SSHRC for financial support