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Rent-seeking with scarce talent: A model of preemptive hiring

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  • Sami Dakhlia

    ()

  • Paul Pecorino

    ()

Abstract

In 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

Suggested Citation

  • Sami Dakhlia & Paul Pecorino, 2006. "Rent-seeking with scarce talent: A model of preemptive hiring," Public Choice, Springer, vol. 129(3), pages 475-486, December.
  • Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:475-486
    DOI: 10.1007/s11127-006-9067-3
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    References listed on IDEAS

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    Cited by:

    1. Paul Schweinzer & Joanna K. Swaffield, 2014. "What’s in it for the firms? Living wage adoption as signal of ethical practice," Discussion Papers 14/21, Department of Economics, University of York.
    2. Stefan Szymanski, 2007. "The Champions League And The Coase Theorem," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 355-373, July.

    More about this item

    Keywords

    Rent-seeking; Scarce talent; Labor market; Lobbying; Preemptive hiring;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - 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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