This short paper aims to find an empirical evidence that al Qaeda behaves as a contest organizer rewarding an indivisible prize – namely, official membership and economic rewards – to candidate extremists groups. Would-be terrorists must then compete with each other to prove their commitment...

Considering several main types of dynamic contests (the race, the tug-of-war, elimination contests and iterated incumbency fights) we identify a common pattern: the discouragement effect. This effect explains why the sum of rent-seeking efforts often falls considerably short of the prize that is...