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Resolving rent-seeking puzzles: A model of political influence via social signals

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Abstract

The empirical observations of underinvestment, loyalty and inequality of access to rent-seeking activities are theoretical puzzles. Drawing on the concepts of power, trust and signals, a new model of political influence via trust-signalling agents is developed. This ‘trust-signalling’ model generates a much richer set of predictions about the market for political influence, resolves the three identified puzzles, and offers a number of testable predictions.

Suggested Citation

  • Cameron K Murray, 2014. "Resolving rent-seeking puzzles: A model of political influence via social signals," Discussion Papers Series 528, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:528
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    File URL: https://economics.uq.edu.au/files/46025/528.pdf
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