Using the political-economic history of the development of telephony during the 1870s as a backdrop, this paper studies a two-player Tullock contest that includes both research effort (R&D) and legal effort (i.e., rent-seeking effort). The two types of efforts complement each other and positively influence the payoff of the contest. We assume that legal effort affects the prize value, increasin...

Union rent-seeking is considered a tax on f irm returns f rom investments in innovative activity. We examine this proposition by considering the responses o f f irms in a 1985 survey on R&D and product innovation. Consistent with our model, we f ind that innovative activity is significantly less important for union than for similar nonunion firms. We conclude that innovative activity may be an ...

ABSTRACT Many economic and informational problems associated with corporate IT spending can be attributed to managerial rent-seeking. IT managers with misaligned incentives and budgetary discretion often entrench themselves through their non-value-maximizing investment decisions. In order to boost their bargaining power in future contract renegotiation, they invest excessively in IT projects th...

While numerous experiments demonstrate how pro-sociality can influence economic decision-making, evidence on explicitly anti-social economic behavior has thus far been limited. In this paper we investigate the importance of spite in experimental rent-seeking contests. Although, as we show, existing evidence of excessive rent-seeking is in theory compatible with fairness considerations, our soci...

The standard analysis of the efficient management of income taxes and debt assumes a benevolent government and ignores potential distortions arising from rent-seeking politicians. This paper departs from this framework by assuming that a rent-seeking politician chooses policies. If the politician chooses extractive policies, citizens throw him out of power. We analyse the efficient sustainable ...

We study the rent-seeking phenomenon using a simple, static general equilibrium model. The economy consists of two sectors, both employing constant returns-to-scale technology with labor as its sole input. One sectors is monopoly, where continuum agents compete for share monopoly profits (i.e. rent). Agents are heterogeneous in productivity and ability: they face choice between engaging (produc...

Rent-seeking behavior by participants in payment for environmental services auctions reduces the number of affordable contracts and decreases environmental protection. I propose a new auction mechanism, the provision point reverse auction (PPRA), to mitigate this rent-seeking behavior. The PPRA includes a public component where the probability of contract acceptance for one individual is affect...