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Collective Rent Dissipation

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  • Nitzan, Shmuel

Abstract

This paper generalizes the widely studied individual rent-seeking model by introducing the possibility of collective rent seeking; n interest groups compete over a fixed rent and individual group members decide voluntarily on the extent of participation in their group rent-seeking activities. The analysis focuses on the possible advantage of free riding in reducing the extent of rent dissipation. The main result establishes the relationship between the extent of rent dissipation and the number and size of the competing groups, the initial wealth and attitude toward risk of the individual players, and the rules applied by the groups to distribute the rent among their members. Copyright 1991 by Royal Economic Society.

Suggested Citation

  • Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-1534, November.
    • Handle: RePEc:ecj:econjl:v:101:y:1991:i:409:p:1522-34
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    References listed on IDEAS

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