COOPERATIVE RENT-SEEKING

This paper presents an analysis of cooperation in the context of a repeated rent-seeking game which can be thought of as modeling bilateral situations such as military/political conflict, labor/business lobbying, gang/illegal activities, or criminal/civil law suits. The potential for mutually advantageous agreements is explored using the repeated nature of the game as the mechanism which sustains the cooperation. The Nash bargaining solution is applied to symmetric as well as asymmetric rent-seeking situations. The asymmetries can derive from the players valuing the rent differently or choosing sequentially.