Efficient rent-seeking under varying cost structures
The rent-seeking paradigm, which was introduced by Tullock (1967), has proven useful for exploring a variety of economic decisions that lie outside the traditional profit maximizing framework. Early applications of Tullock’s insight (Becker, 1968; Krueger, 1974; Posner, 1975; Demsetz, 1976; Foster, 1981 and others) usually assumed the entire value of the rent would be dissipated by competition following the fashion of economic profits in competitive markets. In 1980 Tullock structured a simple game reflecting the decisions made in rent-seeking. The results generated by his model suggest residual rents may accrue to rent-seekers and, under certain conditions, resist dissipation. A number of studies followed Tullock’s 1980 paper (Corcoran, 1984; Corcoran and Karels, 1985; Higgins, Shugart and Tollison, 1985; Tullock, 1984, 1985, and 1987) which explore the dissipation of excess rents under various assumptions.
KeywordsReaction Function Simple Game Revolutionary Activity Poker Game Total Rent
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