Comparative Statics of Contests and Rent-Seeking Games

This paper develops the comparative statics properties of a contest encountered in patent races and rent-seeking games. The author shows that symmetric equilibrium expenditure and profit per player decrease with the number of competitors and the discount rate but increase with the value of the prize. A fundamental lemma established in the paper shows that a stability condition usually imposed on the model is automatically satisfied. The author identifies a class of likelihood or hazard rate functions for which aggregate expenditure increases with the number of competitors and total profits converge to zero.