Rent-Seeking Behavior and Economic Justice: A Classroom Exercise

Aaron Pacitti () and Michael Cauvel ()
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Aaron Pacitti: Siena College
Michael Cauvel: University of Southern Maine

Eastern Economic Journal, 2023, vol. 49, issue 1, No 8, 88-103

Abstract: Abstract Rent-seeking behavior is when individuals or firms acquire above-market returns by exercising economic and political power. We introduce an active-learning exercise, with discussion questions and extensions, to illustrate implications of rent seeking for efficiency, equity, economic justice, and democracy. Students act as corporate decision makers allocating resources among physical, financial, and political investment. Instructors use the results to highlight distinctions between productive and nonproductive activities, and ways in which individual firm incentives may differ from socially optimal firm behavior. This allows for discussions of broader issues, such as how rent seeking can undermine democratic ideals and perpetuate inequality.

Keywords: Rent seeking; Lobbying; Inequality; Pedagogy (search for similar items in EconPapers)
JEL-codes: A22 B50 D72 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41302-022-00225-y

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