On Adverse Selection of Technologies
This paper discusses the interrelation between the choice of technology and rent seeking. First, the players have to decide on the purchase of a technology. If the technology is acquired, realized profits are distributed via a rent-seeking contest. I can show that players will reject profitable technologies ("adverse selection") or underinvest, if they anticipate excessive rent seeking. The results are applied to the empirical findings on differences in income and total factor productivity across countries. These findings can be explained if developing countries are more prone to rent seeking than industrial ones due to their less stable property-rights structures.
Volume (Year): 164 (2008)
Issue (Month): 2 (June)
|Contact details of provider:|| Web page: http://www.mohr.de/jite|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(200806)164:2_343:oasot_2.0.tx_2-v. 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: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.