4 Concluding comments
In this paper, we have shown that the standard Tullock contest game is strate-
gically isomorphic to a Cournot oligopoly game if effort in the Tullock contest
is mapped to outputs in the oligopoly game. Consideration of this isomorphism
indicates some differences in the aspects of the problem considered in the two
literatures. Analysis of Tullock contests has focused on differences in the success
function, while the oligopoly literature has paid more attention to the determi-
nation of the strategic variable. In each case, a range of possible outcomes from
complete rent dissipation to sharing of the maximum rent may be obtained in
appropriate cases.
Understanding of the relationship between contests and imperfectly compet-
itive markets is hampered by the absence of explicit prices and quantities in the
standard contest model. When contests are represented as markets for influ-
ence, we derive a natural strategic equivalence between the standard Tullock
contest and an oligopsonistic market in which expenditure is the strategic vari-
able. Unlike the corresponding case for oligopoly, this outcome turns out to be
less competitive (and hence less dissipative of rent) than the Cournot solution.
Representation of Tullock contests as markets for influence raises a wide
range of possible future developments. Most obviously, the literature on indus-
trial organization focuses on the extent to which the choice of strategic variable
determines whether market outcomes will yield competitive (Bertrand) out-
comes, less competitive (Cournot outcomes) or joint monopoly outcomes, not
to mention a wide range of intermediate possibilities. Analogies with Tullock
contests, including elections, litigation and so on may be fruitful. Beyond this,
it would be natural to consider the implications of the literature on mergers to
determine conditions under which participants in a Tullock contests, such as
political parties, might benefit from the formation of a coalition.
References
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dissipation rates,’ Public Choice 81, 362-380.
[3] Grant, S. and Quiggin, J. (1994), ‘Nash equilibrium with markup-pricing
oligopolists’, Economics Letters 45, 245-51.
[4] Klemperer, P. and M. Meyer, 1989, ‘Supply function equilibria in oligopoly
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