Dari-Mattiacci, G., Onderstal, S. and Parisi, F. (2009). Seeking rents in the shadow of Coase Public Choice, 139(1-2):171--196.

In this paper, we study a two-stage rent-seeking game. In the first stage, contestants compete à-la-Tullock; in the second stage, the winner can resell the rent à-la-Coase. We consider a complete information Tullock game in which the contestants have different valuations for the rent. The analysis focuses on the ex ante effects of a secondary market on efforts, payoffs, rent-dissipation and rent-misallocation. We show that the secondary market, while correcting possible misallocations, may exacerbate rent dissipation. In some situations, the increase in rent dissipation more than offsets the allocative advantage, so that a secondary market might reduce welfare. We further show how the effect of ex post tradeability on welfare depends on the parties{\textquoteright} bargaining power and valuations of the rent, also considering the case of endogenous bargaining power.