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Games 2014, 5(2), 116-126; doi:10.3390/g5020116

Two-Dimensional Effort in Patent-Race Games and Rent-Seeking Contests: The Case of Telephony

1
MPA Program, University of Texas at El Paso, El Paso, TX 79968, USA
2
Center for Economic Education, Columbus State University, Columbus, GA 31907, USA
3
Department of Economics, Rhodes College, Memphis, TN 38112, USA
The authors thank three anonymous referees and Ulrich Berger for many helpful suggestions. Any remaining errors are our own.
*
Author to whom correspondence should be addressed.
Received: 1 January 2014 / Revised: 29 April 2014 / Accepted: 7 May 2014 / Published: 20 May 2014
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Abstract

Using the political-economic history of the development of telephony during the 1870s as a backdrop, this paper studies a two-player Tullock contest that includes both research effort (R&D) and legal effort (i.e., rent-seeking effort). The two types of efforts complement each other and positively influence the payoff of the contest. We assume that legal effort affects the prize value, increasing the winner’s prospective rents, and research effort impacts the probability of winning the contest. The results of the model break new ground in showing that research effort is a function of legal effort, wherein research effort increases with rent-seeking effort. The model also shows the existence of a strategic equivalence between rent seeking and patent races.
Keywords: rent-seeking contests; patent-race games; simultaneous invention; telephony development rent-seeking contests; patent-race games; simultaneous invention; telephony development
This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).

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MDPI and ACS Style

Faria, J.R.; Mixon, Jr., F.G.; Caudill, S.B.; Wineke, S.J. Two-Dimensional Effort in Patent-Race Games and Rent-Seeking Contests: The Case of Telephony. Games 2014, 5, 116-126.

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