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The number of rent-seekers and aggregate rent-seeking expenditures: An unpleasant result

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Abstract

I examine a rent-seeking contest in which the winner gets a minimum rent but also gets an additional rent which is an increasing function of his lobbying expenditure. I give real-world examples of such rent-seeking competitions. Contrary to the standard result in the rent-seeking literature, I obtain the perverse result that aggregate rent-seeking expenditures may be inversely related to the number of rent-seekers. However, I note that even if this result holds, the cost of administering rent-seeking competitions may imply that society is better off with fewer contenders than with an infinitely large number of contenders, although the optimal number may not be the smallest number.

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  1. 671 Highview Road, Pickering, Ontario, Canada, L1V 4W2

    J. Atsu Amegashie

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  1. J. Atsu Amegashie
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Amegashie, J.A. The number of rent-seekers and aggregate rent-seeking expenditures: An unpleasant result. Public Choice 99, 57–62 (1999). https://doi.org/10.1023/A:1018388915533

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  • DOI: https://doi.org/10.1023/A:1018388915533

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