Rent-seeking with scarce talent: A model of preemptive hiring
AbstractIn a standard rent-seeking contest, players optimally employ resources in an attempt to obtain the rent. Typically, it is assumed that these resources may be hired at any desired level at some exogenous per-unit cost. In practice, these resources often consist of scarce, talented individuals. We model a rent-seeking contest with scarce talent and find that talent scarcity leads to preemptive hiring by the player receiving the larger rent. This player hires all available talent and wins the contest with probability 1. This is true even when the difference in rents is small. Copyright Springer Science + Business Media B.V. 2006
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Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 129 (2006)
Issue (Month): 3 (December)
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Web page: http://www.springerlink.com/link.asp?id=100332
Rent-seeking; Scarce talent; Labor market; Lobbying; Preemptive hiring;
Other versions of this item:
- Sami Dakhlia & Paul Pecorino, 2005. "Rent-seeking with scarce talent: a model of preemptive hiring," Microeconomics 0505002, EconWPA.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- J4 - Labor and Demographic Economics - - Particular Labor Markets
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