Rent-seeking in the trade sector is an outcome of restrictions imposed on tariffs and import quotas by a government. In an effort to acquire more privilege in foreign trade, labor allocates a part of its time-effort to rent-seeking activity, while cutting down on production work. Given the importance of rent-seeking activity due to restrictions imposed by the government in the Iranian economy, ...

The costs of rent seeking exceed traditional measures when opportunity cost is considered. When the quantity of resources consumed by rent seeking is large, rent seeking draws consumer surplus out of alternative resource employments. The costs of rent seeking differ in partial and general equilibrium frameworks; Tullock (1989) recognizes this but incorrectly argues that rent seeking costs are t...

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 “blackboxed.” 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...

Rent-seeking models have been used to predict and explain a wide variety of political decisions. This paper extends Tullock’s classic rent-seeking model to the case of a risky rent, where the winner of the rent-seeking contest does not receive the rent for sure, but only probabilistically. We derive the equilibrium and comparative static predictions from our extended model and present the resul...

The establishment of a tradable permit market requires the regulator to select a level of aggregate emissions and then distribute the associated permits to specific groups. Both these decisions create opportunities for rent seeking. In this paper, we use a contest model to analyse the incentives to rent seek for pollution permits and to analyse the consequences for social welfare. We find diffe...

This paper discusses the optimal firm size in the presence of internal rent seeking. Since firm size has a discouragement effect on the level of individual rent-seeking but also a quantity effect as the number of rent-seekers increases, the interplay of both effects — together with technological considerations — determines whether the employer chooses an inefficiently small or large firm size. ...

We consider the effects of rent-seeking activities on resource allocation. Before rent-seeking activities take place, there are prior probabilities that an object will be given to one of several agents. The posterior probability depends on prior probabilities and the expenses incurred by all agents. In the case of two agents who equally value the object, prior and posterior probabilities coinci...

In this paper we present a model where agents can choose between 1 productive and rent-seeking activities.We consider two governance institutions: 2 autocracy and parliament rule. Under autocracy rent-seeking reflects the taste 3 of the autocrat for such activities. Under parliament rule rent-seeking depends 4 on parliament voting. We show that under parliament rule the size of rent5 seeking ma...