Sharing rules in rent-seeking contests with third-party intervention

This paper presents and solves a model of third-party intervention in rent-seeking contests. Two players are engaged in a rent-seeking contest, while each of the two players can be supported by a third party. In return, the third party receives a share of the prize if the supported player wins. I use this model to discuss how equilibrium behavior depends on the sharing rule between the third party and the supported player. Among others, I find that a third party may have an incentive to increase support despite a reduction of his share of the prize.