A Theory of Rent Seeking with Informational Foundations
I develop a model of rent seeking with informational foundations and an arbitrary number of rent seekers, and I compare the results with Tullock's (1980) classic model where the influence activities are "black-boxed." Given the microfoundations, the welfare consequences of rent seeking can be studied. In particular, I show that competition among rent seekers can be socially beneficial, since the additional information that the decision maker gets access to makes the increase in rent-seeking expenditures worthwhile. However, the analysis also highlights a logic that, under natural parameter assumptions, makes the rent seekers spend more resources on rent seeking than is in society's interest, which is consistent with the spirit of the rent-seeking literature.
|Date of creation:||Sep 2006|
|Date of revision:||Sep 2006|
|Contact details of provider:|| Postal: |
Phone: +44 1784-414228
Fax: +44 1784-439534
Web page: http://www.rhul.ac.uk/economics/
|Order Information:|| Postal: Egham Hill, Egham, Surrey, TW20 0EX, UK.|
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.:
- Lars Frisell & Johan N. M. Lagerlöf, 2007. "A Model of Reputation in Cheap Talk," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(1), pages 49-70, 03.
- Morten Bennedsen & Sven E. Feldmann, 2002.
Journal of Political Economy,
University of Chicago Press, vol. 110(4), pages 919-948, August.
- Bennedsen, Morten & Feldmann, Sven E., 2000. "Lobbying Legislatures," Working Papers 07-2000, Copenhagen Business School, Department of Economics.
- Morten Bennedsen & Sven E. Feldmann, 2000. "Lobbying Legislatures," CIE Discussion Papers 2000-04, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Paul Milgrom & John Roberts, 1986.
"Relying on the Information of Interested Parties,"
RAND Journal of Economics,
The RAND Corporation, vol. 17(1), pages 18-32, Spring.
- Jean-Jacques Laffont & Jean Tirole, 1991. "The Politics of Government Decision-Making: A Theory of Regulatory Capture," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1089-1127.
- Potters, Jan & van Winden, Frans, 1992. " Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-92, October.
- 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.
- Heidhues, Paul & Lagerlöf, Johan N. M., 2003.
"On the Desirability of an Efficiency Defense in Merger Control,"
CEPR Discussion Papers
3841, C.E.P.R. Discussion Papers.
- Lagerlof, Johan N.M. & Heidhues, Paul, 2005. "On the desirability of an efficiency defense in merger control," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 803-827, December.
- Johan Lagerlöf & Paul Heidhues, 2002. "On the Desirability of an Efficiency Defense in Merger Control," CIG Working Papers FS IV 02-08, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Johan N. M. Lagerlöf & Paul Heidhues, 2004. "On the Desirability of an Efficiency Defense in Merger Control," Royal Holloway, University of London: Discussion Papers in Economics 04/24, Department of Economics, Royal Holloway University of London, revised Oct 2004.
- Tullock, Gordon, 1975. "On the Efficient Organization of Trials," Kyklos, Wiley Blackwell, vol. 28(4), pages 745-62.
- Lohmann, Susanne, 1994. "Information Aggregation through Costly Political Action," American Economic Review, American Economic Association, vol. 84(3), pages 518-30, June.
- Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
- Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753.
- Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
- Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
When requesting a correction, please mention this item's handle: RePEc:hol:holodi:0604. 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: (Claire Blackman)The email address of this maintainer does not seem to be valid anymore. Please ask Claire Blackman to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.