Bargaining with Rent Seekers

Amihai Glazer

Journal of Public Economic Theory, 2008, vol. 10, issue 5, 859-871

Abstract: Consider a rent‐seeking game, which has government bargain with firms over dividing the rents. In period 1, each firm can invest to increase the probability that the rent will appear. In period 2, the parties bargain. In equilibrium, though firms will invest more than the socially optimal level, rent‐seeking expenditures may be low. Firms that collude to restrict investment maximize joint profits by investing at a positive, non‐infinitesimal level, and restrict investment even if the cost of rent‐seeking effort is zero.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/j.1467-9779.2008.00389.x

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: https://EconPapers.repec.org/RePEc:bla:jpbect:v:10:y:2008:i:5:p:859-871

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1097-3923

Access Statistics for this article

Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

More articles in Journal of Public Economic Theory from Association for Public Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().