Life Among the Triangles and Trapezoids: Notes on the Theory of Rent-Seeking

  • Richard S. Higgins
  • Robert D. Tollison
Chapter
Part of the Topics in Regulatory Economics and Policy book series (TREP, volume 1)

Abstract

Some government programs and policies reduce wealth through rent creation. In this paper we focus on the theory of rent-seeking, and armed with an analytical model of the rent-seeking process, we make three basic points. First, we explain why perfect dissipation of rents is not equivalent to a competitive return to rent-seeking. Second, we demonstrate that the social cost of rent creation may be smaller when all rents are dissipated by rent-seeking than when no rents are dissipated. Third, we explain that regardless of whether rents are dissipated in transferring them, there is a distribution effect of rent-seeking that has been ignored in the literature.

Keywords

Social Cost Expect Profit High Bidder Rent Seeker Downstream Producer 
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References

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Copyright information

© Springer Science+Business Media New York 1988

Authors and Affiliations

  • Richard S. Higgins
  • Robert D. Tollison

There are no affiliations available

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