Group contests with intragroup altruism

Abstract

This paper studies a model of intergroup rent-seeking contests that incorporates intragroup altruism to investigate its effects on individual effort levels, group performance, and rent dissipation under different distribution rules. This paper finds that a higher level of intragroup altruism increases individual effort levels, group performance, and rent dissipation when the extent of the egalitarianism of distribution rules is sufficiently high. Also, in this circumstance, a smaller group is found to perform better in contests and rent dissipation decreases in group size. On the other hand, under distribution rules closer to competitive schemes, intragroup altruism decreases players' effort, group performance, and rent dissipation. In this situation, a larger group is discovered to be more advantageous and rent dissipation increases with group size.