Policies to Reduce Rent Seeking in Controlled Markets

Sunwoong Kim and Yoo, Yoon-Ha

International Economic Journal, 2007, vol. 21, issue 1, pages 27-47

Abstract: We analyze the effects of various policies to reduce rent seeking in the controlled market in which buyers have heterogeneous valuation regarding the coveted good. The good is allocated according to the buyer-specific signal ('test score'), which is determined by the quantity of wasteful 'rent seeking' exerted by the buyer. We consider three common forms of market control: minimum qualification score, quota, and price ceiling. The potential buyers with higher valuations are more likely to receive the good in equilibrium, while they exert more rent-seeking efforts. Marginally relaxing market control does not necessarily decrease the aggregated amount of rent-seeking activities, and the effectiveness of policy measures usually depends on the current degree of competitiveness in the market.

Keywords: Rent seeking; screening; contest; quota; price control (search for similar items in EconPapers)
Date: 2007

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:taf:intecj:v:21:y:2007:i:1:p:27-47

Ordering information: This journal article can be ordered from
http://www.tandf.co.uk/journals/subscription.html

Access Statistics for this article

International Economic Journal is edited by Jaymin Lee

More articles in International Economic Journal from Korean International Economic Association
Series data maintained by Christopher F. Baum ().