A Rent-Seeking Experiment for the Classroom
Abstract: Recent research has demonstrated that active learning techniques improve student comprehension and retention of abstract economic ideas such as rent seeking. Instructors can reinforce the concept of rent seeking with a classroom game, particularly one involving real money. The authors improve upon a game first introduced by Goeree and Holt (1999) and later expanded upon by Bischoff and Hofmann (2002). The authors present a version of the game in which students participate in an all-pay auction, risking their own money, and discover first hand the potential inefficiencies of rent seeking. The authors suggest extensions of the rent-seeking game, including discussions of social welfare effects, equity, campaign finance reform, tax simplification, and congressional reforms designed to limit the influence of rent seeking in the economy.
Volume (Year): 37 (2006)
Issue (Month): 3 (July)
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