The Number of Rent-Seekers and Aggregate Rent-Seeking Expenditures: An Unpleasant Result

J. Atsu Amegashie

Public Choice, 1999, vol. 99, issue 1-2, 57-62

Abstract: The author examines a rent-seeking contest in which the winner gets a minimum rent but also gets an additional rent that is an increasing function of his lobbying expenditure. He gives real-world examples of such rent-seeking competitions. Contrary to the standard result in the rent-seeking literature, the author obtains the perverse result that aggregate rent-seeking expenditures may be inversely related to the number of rentseekers. However, he notes that, even if this result holds, the cost of administering rent-seeking competitions may imply that society is better-off with fewer contenders than with an infinitely large number of contenders, although the optimal number may not be the smallest number. Copyright 1999 by Kluwer Academic Publishers

Date: 1999
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