DP3050 Investment in the Absence of Property Rights: The Role of Incumbency Advantages
|Author(s):||Kai A. Konrad|
|Publication Date:||November 2001|
|Keyword(s):||contests, endogenous property rights, incumbency advantage, investment, proprietry states|
|JEL(s):||D23, D72, D74, H54, O10, P16|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3050|
In many situations the individuals who can generate some output must enter a contest for appropriating this output. This Paper analyses the investment incentives of such agents and the role of incumbency advantages in the contest. Depending on the advantages, an increase in the productivity of the investment can decrease or increase the amount of investment. The results are applied to autocrats' investment behaviour and job specific investment in organizations.