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Rent seeking and the value of time

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  • Edmund Mantell

Abstract

This paper focuses on the question of how rivals’ rent-seeking expenditures and investment expenditures are affected by the temporal dimension of those cash flows as well as the timing of the cash flow of monopoly rents. The paper applies methods from statistical reliability theory to derive five propositions establishing the conditions that must be satisfied if the rivals apportion their rent seeking and investment expenditures to maximize their certainty equivalents of the monopoly rent. The propositions explicate the responses of the rivals to changes in economic parameters characterizing the rent-seeking contest such as a change in the duration of the monopoly rent cash flow or a change in the number of rivals. Copyright Springer 2005

Suggested Citation

  • Edmund Mantell, 2005. "Rent seeking and the value of time," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 29(2), pages 221-241, June.
    • Handle: RePEc:spr:jecfin:v:29:y:2005:i:2:p:221-241
    DOI: 10.1007/BF02761555
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    References listed on IDEAS

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    1. Elie Appelbaum & Eliakim Katz, 2008. "Seeking Rents by Setting Rents: The Political Economy of Rent Seeking," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 555-569, Springer.
    2. Fisher, Franklin M, 1985. "The Social Costs of Monopoly and Regulation: Posner Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 410-416, April.
    3. Esty, Daniel C & Caves, Richard E, 1983. "Market Structure and Political Influence: New Data on Political Expenditures, Activity, and Success," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 24-38, January.
    4. Baik, Kyung Hwan, 1999. "Rent-Seeking Firms, Consumer Groups, and the Social Costs of Monopoly," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 541-553, July.
    5. Jack Hirshleifer, 1989. "Conflict and rent-seeking success functions: Ratio vs. difference models of relative success," Public Choice, Springer, vol. 63(2), pages 101-112, November.
    6. Hurley, Terrance M. & Shogren, Jason F., 1998. "Effort levels in a Cournot Nash contest with asymmetric information," Journal of Public Economics, Elsevier, vol. 69(2), pages 195-210, June.
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