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Rent Seeking and Rent Setting with Asymmetric Effectiveness of Lobbying

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  • Kohli, Inderjit
  • Singh, Nirvikar

Abstract

This paper provides a more general model of the determination of rent-seeking costs by combining the following features: endogenous rent determination, asymmetric effectiveness of contending agents in their lobbying efforts, and multiple periods. In doing so, the paper generalizes some aspects of the work of Applebaum and Katz (1987), Rogerson (1982), Leininger (1992), and Kohli (1992). Some results obtained are: (1) in the short run, when the regulator's salary is higher than in an alternative occupation, both the per unit cost of rentseeking and the total rent set by regulator are highest for the same value of the relative effectiveness parameter; (2) in the long run, an increase in the effectiveness parameter leads to a reduction in the social costs of rent seeking; and (3) in a repeated game, the equilibrium rent is lower the higher is the regulator's discount factor. Copyright 1999 by Kluwer Academic Publishers

Suggested Citation

  • Kohli, Inderjit & Singh, Nirvikar, 1999. "Rent Seeking and Rent Setting with Asymmetric Effectiveness of Lobbying," Public Choice, Springer, vol. 99(3-4), pages 275-298, June.
  • Handle: RePEc:kap:pubcho:v:99:y:1999:i:3-4:p:275-98
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    Citations

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    Cited by:

    1. E. Feess & Gerd Muehlheusser & M. Walzl, 2008. "Unfair contests," Journal of Economics, Springer, vol. 93(3), pages 267-291, April.
      • Feess Eberhard & Muehlheusser Gerd & Walzl Markus, 2004. "Unfair Contests," Research Memorandum 050, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    2. Klaus Abbink & David Masclet & Daniel Mirza, 2018. "Inequality and inter-group conflicts: experimental evidence," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(3), pages 387-423, March.
    3. Epstein, Gil S. & Nitzan, Shmuel, 2004. "Strategic restraint in contests," European Economic Review, Elsevier, vol. 48(1), pages 201-210, February.
    4. Marco Runkel, 2003. "Optimal Contest Design when the Designer’s Payoff Depends on Competitive Balance," CESifo Working Paper Series 1009, CESifo Group Munich.
    5. repec:elg:eechap:15325_5 is not listed on IDEAS
    6. repec:kap:pubcho:v:173:y:2017:i:1:d:10.1007_s11127-017-0473-5 is not listed on IDEAS
    7. Alexander M. Yarkin, 2014. "Endogenous Property Rights, Conflict Intensity And Inequality In Asymmetric Rent-Seeking Contest," HSE Working papers WP BRP 72/EC/2014, National Research University Higher School of Economics.
    8. Bjorvatn, Kjetil & Selvik, Kjetil, 2008. "Destructive Competition: Factionalism and Rent-Seeking in Iran," World Development, Elsevier, vol. 36(11), pages 2314-2324, November.
    9. Gil Epstein & Igal Milchtaich & Shmuel Nitzan & Mordechai Schwarz, 2007. "Ambiguous political power and contest efforts," Public Choice, Springer, vol. 132(1), pages 113-123, July.
    10. Marco Runkel, 2006. "Optimal contest design, closeness and the contest success function," Public Choice, Springer, vol. 129(1), pages 217-231, October.
    11. Giuseppe Dari-Mattiacci & Eric Langlais & Bruno Lovat & Francesco Parisi, 2013. "Asymmetries in Rent-Seeking," EconomiX Working Papers 2013-5, University of Paris Nanterre, EconomiX.

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