Do Too Many Cooks Always Spoil the Stew? An Experimental Analysis of Rent-Seeking and the Role of a Strategic Buyer
Laboratory methods are used to evaluate the effects of institutional arrangements and rent-defending activity on rent-seeking auction outcomes. In part, Nash equilibrium predictions are a useful behavioral guide: as predicted, more rents are dissipated in perfectly-discriminating auctions, where the high-bidder wins, than in lotteries, where relative bids determine the chance of winning. Also as predicted, the introduction of a rent-defending buyer reduces social costs. Nevertheless, the social costs of rent-seeking consistently exceed predicted levels. Moreover, individual bidding, especially by buyers, deviates markedly from Nash predictions. Copyright 1998 by Kluwer Academic Publishers
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shogren, Jason F & Baik, Kyung H, 1991. " Reexamining Efficient Rent-Seeking in Laboratory Markets," Public Choice, Springer, vol. 69(1), pages 69-79, February.
- Ellingsen, T., 1990.
"Strategic Buyers and the Social Cost of Monopoly,"
05-90, Norwegian School of Economics and Business Administration-.
- Tollison, Robert D, 1982. "Rent Seeking: A Survey," Kyklos, Wiley Blackwell, vol. 35(4), pages 575-602.
- Elie Appelbaum & Eliakim Katz, 1996.
"Transfer seeking and avoidance: On the full social costs of rent seeking,"
1996_11, York University, Department of Economics.
- Elie Appelbaum & Eliakim Katz, 1986. "Transfer seeking and avoidance: On the full social costs of rent seeking," Public Choice, Springer, vol. 48(2), pages 175-181, January.
- Nitzan, Shmuel, 1991. " Rent-Seeking with Non-identical Sharing Rules," Public Choice, Springer, vol. 71(1-2), pages 43-50, August.
- Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-27, August.
- Dougan, William R & Snyder, James M, 1993. " Are Rents Fully Dissipated?," Public Choice, Springer, vol. 77(4), pages 793-813, December.
- Wenders, John T, 1987. "On Perfect Rent Dissipation," American Economic Review, American Economic Association, vol. 77(3), pages 456-59, June.
- Arye Hillman & Dov Samet, 1987. "Characterizing equilibrium rent-seeking behavior: A reply to Tullock," Public Choice, Springer, vol. 54(1), pages 85-87, January.
- Torsten Schmidt, 1992. "Rent-Seeking Firms And Consumers: An Equilibrium Analysis," Economics and Politics, Wiley Blackwell, vol. 4(2), pages 137-149, 07.
- Millner, Edward L & Pratt, Michael D, 1991. " Risk Aversion and Rent-Seeking: An Extension and Some Experimental Evidence," Public Choice, Springer, vol. 69(1), pages 81-92, February.
- Fisher, Franklin M, 1985. "The Social Costs of Monopoly and Regulation: Posner Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 410-16, April.
- Edward Millner & Michael Pratt, 1989. "An experimental investigation of efficient rent-seeking," Public Choice, Springer, vol. 62(2), pages 139-151, August.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:95:y:1998:i:1-2:p:89-115. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.