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Predation, Efficiency, and Inequality

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  • Herschel I. Grossman
  • Minseong Kim

Abstract

This paper analyzes a general-equilibrium model in which each person can choose to be either a producer or a predator. This model shows how predation breaks the link between the interpersonal distribution of productive resources and the inter-personal distribution of consumption. Specifically, we find that in this model the Rawlsian criterion of maximizing the expected consumption of the least advantaged person selects an unegalitarian distribution of productive resources in which a positive fraction of people have only the minimum possible endowment of productive resources. Also, an egalitarian distribution of productive resources is not even Pareto efficient.

Suggested Citation

  • Herschel I. Grossman & Minseong Kim, 2002. "Predation, Efficiency, and Inequality," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(3), pages 393-393, September.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200209)158:3_393:peai_2.0.tx_2-o
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    References listed on IDEAS

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    1. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-1288, December.
    2. repec:cup:apsrev:v:79:y:1985:i:04:p:943-957_23 is not listed on IDEAS
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    Cited by:

    1. Ranasinghe, Ashantha, 2017. "Property rights, extortion and the misallocation of talent," European Economic Review, Elsevier, vol. 98(C), pages 86-110.
    2. Jan U. Auerbach & Costas Azariadis, 2015. "Property Rights, Governance, and Economic Development," Review of Development Economics, Wiley Blackwell, vol. 19(2), pages 210-220, May.
    3. Bos, Dieter & Kolmar, Martin, 2003. "Anarchy, efficiency, and redistribution," Journal of Public Economics, Elsevier, vol. 87(11), pages 2431-2457, October.
    4. Peter T. Leeson, 2007. "Trading with Bandits," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 303-321.
    5. Shankha Chakraborty & Era Dabla-Norris, 2006. "Rent Seeking," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-2.
    6. Kolmar, Martin, 2005. "The contribution of Herschel I. Grossman to political economy," European Journal of Political Economy, Elsevier, vol. 21(4), pages 802-814, December.
    7. Herschel I. Grossman & Minseong Kim, 2003. "Educational Policy: Egalitarian or Elitist?," Economics and Politics, Wiley Blackwell, vol. 15(3), pages 225-246, November.
    8. Herschel I. Grossman, 1998. "Producers and Predators," Working Papers 98-6, Brown University, Department of Economics.
    9. Grossman, Herschel I., 2005. "Inventors and pirates: creative activity and intellectual property rights," European Journal of Political Economy, Elsevier, vol. 21(2), pages 269-285, June.
    10. Bos, Dieter & Kolmar, Martin, 2003. "Anarchy, efficiency, and redistribution," Journal of Public Economics, Elsevier, vol. 87(11), pages 2431-2457, October.
    11. Herschel I. Grossman & Minseong Kim, 1998. "Human Capital and Predation: A Positive Theory of Educational Policy," NBER Working Papers 6403, National Bureau of Economic Research, Inc.
    12. Rodolfo Apreda, 2004. "Corporate Rent-Seeking and the managerial soft-budget constraint," CEMA Working Papers: Serie Documentos de Trabajo. 283, Universidad del CEMA.
    13. Grossman, Herschel I., 2002. ""Make us a king": anarchy, predation, and the state," European Journal of Political Economy, Elsevier, vol. 18(1), pages 31-46, March.
    14. Fujii, Dmitri, 2009. "Who Wants To Be a Genius?," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(09), pages 7-54, segundo s.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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