The Dynamic of Collective Action, Group Size and the Degree of Rivalry of the Rent

In this paper, we study the ability of group members to cooperate in rent-seeking in order to challenge the position of an incumbent for the award of a rent. Specifically, we consider a repeated game in which group members use Nash reversion strategies to support cooperative behavior within the group. In addition, the rent underlying the conflict has a varying mix of public and private characteristics between a public (non-divisible) good and a private (divisible) good. We then show that cooperation within the group is more difficult to sustain as a subgame perfect Nash equilibrium as the degree of rivalry of the rent increases. However, the larger the size of the community, the more its members are able to support within-group cooperation no matter flow private (or public) the rent.