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Taxation of rent-seeking activities

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  • Glazer, Amihai
  • Konrad, Kai A.

Abstract

We consider taxes on firms which engage in rent-seeking contests. The taxes can be on realized profits or on rent-seeking expenditures, and the firms can engage in a context where either the hoghest bidder wins the prize, or else a firm's probability of winning equals the ratio of its expenditures to expenditures by all firms. We find the deadweight loss, and cause no reduction in the profits of firms.
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  • Glazer, Amihai & Konrad, Kai A., 1999. "Taxation of rent-seeking activities," Journal of Public Economics, Elsevier, vol. 72(1), pages 61-72, April.
  • Handle: RePEc:eee:pubeco:v:72:y:1999:i:1:p:61-72
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    Cited by:

    1. Amihai Glazer & Stef Proost, 2020. "Benefits to the majority from universal service," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(2), pages 391-408, April.
    2. Chowdhury, Subhasish M. & Sheremeta, Roman M., 2011. "Multiple equilibria in Tullock contests," Economics Letters, Elsevier, vol. 112(2), pages 216-219, August.
    3. Michael R. Baye & John Morgan, 2009. "Brand and Price Advertising in Online Markets," Management Science, INFORMS, vol. 55(7), pages 1139-1151, July.
    4. Ezra Einy & Ori Haimanko & Diego Moreno & Aner Sela & Benyamin Shitovitz, 2013. "Tullock Contests With Asymmetric Information," Working Papers 1303, Ben-Gurion University of the Negev, Department of Economics.
    5. Subhasish Chowdhury & Roman Sheremeta, 2015. "Strategically equivalent contests," Theory and Decision, Springer, vol. 78(4), pages 587-601, April.
    6. A. Aiche & E. Einy & O. Haimanko & D. Moreno & A. Sela & B. Shitovitz, 2019. "Information in Tullock contests," Theory and Decision, Springer, vol. 86(3), pages 303-323, May.
    7. Yizhaq Minchuk & Aner Sela, 2021. "Subsidy and Taxation in All-Pay Auctions under Incomplete," Working Papers 2104, Ben-Gurion University of the Negev, Department of Economics.
    8. Kahana, Nava & Klunover, Doron, 2014. "Rent seeking and the excess burden of taxation," European Journal of Political Economy, Elsevier, vol. 35(C), pages 158-167.
    9. Ian A. MacKenzie, 2009. "Controlling externalities in the presence of rent seeking," CER-ETH Economics working paper series 09/111, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    10. Aner Sela & Ezra Einy & 0ri Haimanko & Diego Moreno & Avishay Aiche & Benyamin Shitovitz, 2016. "Information Advantage in Common-Value Classic Tullock Contests," Working Papers 1614, Ben-Gurion University of the Negev, Department of Economics.
    11. Alex Robson & Stergios Skaperdas, 2008. "Costly enforcement of property rights and the Coase theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(1), pages 109-128, July.
    12. Michael Hilmer, 2014. "Too Many to Fail - How Bonus Taxation Prevents Gambling for Bailouts," Working Papers tax-mpg-rps-2014-18, Max Planck Institute for Tax Law and Public Finance.
    13. Subhashish Modak Chowdhury & Roman M. Sheremeta, 2009. "The equivalence of contests," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 09-06, School of Economics, University of East Anglia, Norwich, UK..
    14. Subhasish Chowdhury & Roman Sheremeta, 2011. "A generalized Tullock contest," Public Choice, Springer, vol. 147(3), pages 413-420, June.
    15. Kahana, Nava & Klunover, Doron, 2014. "Rent Seeking and the Excess Burden of Taxation," IZA Discussion Papers 8160, Institute of Labor Economics (IZA).
    16. J. Amegashie, 2004. "A political economy model of immigration quotas," Economics of Governance, Springer, vol. 5(3), pages 255-267, November.
    17. repec:elg:eechap:15325_13 is not listed on IDEAS
    18. Michael Hilmer, 2014. "Bailouts, Bonuses and Bankers' Short-Termism," Working Papers tax-mpg-rps-2014-17, Max Planck Institute for Tax Law and Public Finance.
    19. Konrad, Kai A., 2007. "Strategy in contests: an introduction [Strategie in Turnieren – eine Einführung]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, WZB Berlin Social Science Center.
    20. Alcalde, José & Dahm, Matthias, 2010. "Rent seeking and rent dissipation: A neutrality result," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 1-7, February.
    21. Aner Sela & Yizhaq Minchuk, 2022. "Subsidy and Taxation in All-Pay Auctions under Incomplete," Working Papers 2204, Ben-Gurion University of the Negev, Department of Economics.
    22. Ian A. MacKenzie & Markus Ohndorf, 2014. "Coasean Bargaining in the Presence of Pigouvian Taxation: Revisiting the Buchanan-Stubblebine-Turvey Theorem," Discussion Papers Series 515, School of Economics, University of Queensland, Australia.
    23. Michael R. Baye & John Morgan, 2005. "Probabilistic Patents," Microeconomics 0504004, University Library of Munich, Germany.
    24. MacKenzie, Ian A. & Ohndorf, Markus, 2016. "Coasean bargaining in the presence of Pigouvian taxation," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 1-11.

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    More about this item

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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