Long-run equilibrium and total expenditures in rent-seeking View Full Text


Ontology type: schema:ScholarlyArticle     


Article Info

DATE

1984-01

AUTHORS

William J. Corcoran

ABSTRACT

The objective of this paper is to investigate the assertion that a given rent payoff gives rise to an equal value of total expenditure. An analogy with perfect competition suggests a long-run perspective, which would allow the number of players to vary. Accordingly, a game theoretic model of the competitive process where competitors anticipate rival reactions and expend resources to increase their probability of winning is extended to include entry. Long-run quilibrium occurs when the incentive for entry is dissipated, i.e., expected profits equal 0 or the expected rate of return equals the opportunity cost discount rate. When this occurs total expenditure in rent-seeking is found to equal the payoff as in the standard competitive case. How does this result affect Tullock's policy recommendations? His first finding that total expenditures in rent-seeking can be minimized by holding the number of players down remains intact. Essentially, this requirement restricts entry and as a result maintains the short-run conditions indicated by equations (2) and (3) for a given number of firms. His second recommendation, that of increasing the marginal cost of improving a player's probability of winning must, however, be qualified. If the long-run equilibrium is attained total expenditures will equal the payoff regardless of the marginal cost. If the marginal cost is such that the long-run equilibrium is unbounded, there exists a continuous incentive for new entry. It is possible that total expenditures will increase as entry mounts, but this cannot be determined. A policy of increasing the marginal cost will work, however, if carried out in conjunction with a restriction on entry. In this case the short-run results still apply. Finally, an additional policy recommendation can be deduced. From equation (10) total rent-seeking expenditures will be reduced if the opportunity cost discount rate of return is increased. This may be achieved by such actions as increasing the lag between rent-seeking expenditures and the associated payoff, or unfettering alternative productive investments (reduced taxes, deregulation, etc.). Both result in a larger discount of the payoff. The results support the concern with rent-seeking behavior. It indicates that in the long-run each opportunity for rent — a transfer of wealth — displaces an opportunity for the creation of value which will be equal to or greater than the rent payoff. It will be greater, of course, where the investment alternative cannot capture the full social gain. More... »

PAGES

89-94

Journal

TITLE

Public Choice

ISSUE

1

VOLUME

43

Author Affiliations

Identifiers

URI

http://scigraph.springernature.com/pub.10.1007/bf00137909

DOI

http://dx.doi.org/10.1007/bf00137909

DIMENSIONS

https://app.dimensions.ai/details/publication/pub.1046023341


Indexing Status Check whether this publication has been indexed by Scopus and Web Of Science using the SN Indexing Status Tool
Incoming Citations Browse incoming citations for this publication using opencitations.net

JSON-LD is the canonical representation for SciGraph data.

TIP: You can open this SciGraph record using an external JSON-LD service: JSON-LD Playground Google SDTT

[
  {
    "@context": "https://springernature.github.io/scigraph/jsonld/sgcontext.json", 
    "about": [
      {
        "id": "http://purl.org/au-research/vocabulary/anzsrc-for/2008/1402", 
        "inDefinedTermSet": "http://purl.org/au-research/vocabulary/anzsrc-for/2008/", 
        "name": "Applied Economics", 
        "type": "DefinedTerm"
      }, 
      {
        "id": "http://purl.org/au-research/vocabulary/anzsrc-for/2008/14", 
        "inDefinedTermSet": "http://purl.org/au-research/vocabulary/anzsrc-for/2008/", 
        "name": "Economics", 
        "type": "DefinedTerm"
      }
    ], 
    "author": [
      {
        "affiliation": {
          "alternateName": "University of Nebraska at Omaha", 
          "id": "https://www.grid.ac/institutes/grid.266815.e", 
          "name": [
            "Economics Program, University of Nebraska, 68182, Omaha, NE"
          ], 
          "type": "Organization"
        }, 
        "familyName": "Corcoran", 
        "givenName": "William J.", 
        "id": "sg:person.013455267135.45", 
        "sameAs": [
          "https://app.dimensions.ai/discover/publication?and_facet_researcher=ur.013455267135.45"
        ], 
        "type": "Person"
      }
    ], 
    "citation": [
      {
        "id": "https://doi.org/10.1111/j.1465-7295.1967.tb01923.x", 
        "sameAs": [
          "https://app.dimensions.ai/details/publication/pub.1030323183"
        ], 
        "type": "CreativeWork"
      }, 
      {
        "id": "https://doi.org/10.1086/259394", 
        "sameAs": [
          "https://app.dimensions.ai/details/publication/pub.1058572875"
        ], 
        "type": "CreativeWork"
      }, 
      {
        "id": "https://doi.org/10.1086/260357", 
        "sameAs": [
          "https://app.dimensions.ai/details/publication/pub.1058573838"
        ], 
        "type": "CreativeWork"
      }, 
      {
        "id": "https://doi.org/10.2307/1879604", 
        "sameAs": [
          "https://app.dimensions.ai/details/publication/pub.1069623159"
        ], 
        "type": "CreativeWork"
      }
    ], 
    "datePublished": "1984-01", 
    "datePublishedReg": "1984-01-01", 
    "description": "The objective of this paper is to investigate the assertion that a given rent payoff gives rise to an equal value of total expenditure. An analogy with perfect competition suggests a long-run perspective, which would allow the number of players to vary. Accordingly, a game theoretic model of the competitive process where competitors anticipate rival reactions and expend resources to increase their probability of winning is extended to include entry. Long-run quilibrium occurs when the incentive for entry is dissipated, i.e., expected profits equal 0 or the expected rate of return equals the opportunity cost discount rate. When this occurs total expenditure in rent-seeking is found to equal the payoff as in the standard competitive case. How does this result affect Tullock's policy recommendations? His first finding that total expenditures in rent-seeking can be minimized by holding the number of players down remains intact. Essentially, this requirement restricts entry and as a result maintains the short-run conditions indicated by equations (2) and (3) for a given number of firms. His second recommendation, that of increasing the marginal cost of improving a player's probability of winning must, however, be qualified. If the long-run equilibrium is attained total expenditures will equal the payoff regardless of the marginal cost. If the marginal cost is such that the long-run equilibrium is unbounded, there exists a continuous incentive for new entry. It is possible that total expenditures will increase as entry mounts, but this cannot be determined. A policy of increasing the marginal cost will work, however, if carried out in conjunction with a restriction on entry. In this case the short-run results still apply. Finally, an additional policy recommendation can be deduced. From equation (10) total rent-seeking expenditures will be reduced if the opportunity cost discount rate of return is increased. This may be achieved by such actions as increasing the lag between rent-seeking expenditures and the associated payoff, or unfettering alternative productive investments (reduced taxes, deregulation, etc.). Both result in a larger discount of the payoff. The results support the concern with rent-seeking behavior. It indicates that in the long-run each opportunity for rent \u2014 a transfer of wealth \u2014 displaces an opportunity for the creation of value which will be equal to or greater than the rent payoff. It will be greater, of course, where the investment alternative cannot capture the full social gain.", 
    "genre": "research_article", 
    "id": "sg:pub.10.1007/bf00137909", 
    "inLanguage": [
      "en"
    ], 
    "isAccessibleForFree": false, 
    "isPartOf": [
      {
        "id": "sg:journal.1027434", 
        "issn": [
          "0048-5829", 
          "1573-7101"
        ], 
        "name": "Public Choice", 
        "type": "Periodical"
      }, 
      {
        "issueNumber": "1", 
        "type": "PublicationIssue"
      }, 
      {
        "type": "PublicationVolume", 
        "volumeNumber": "43"
      }
    ], 
    "name": "Long-run equilibrium and total expenditures in rent-seeking", 
    "pagination": "89-94", 
    "productId": [
      {
        "name": "readcube_id", 
        "type": "PropertyValue", 
        "value": [
          "db3ad2db9fb65ac304180084a7f49958ab52115fb1b60a3d7d186858da27e120"
        ]
      }, 
      {
        "name": "doi", 
        "type": "PropertyValue", 
        "value": [
          "10.1007/bf00137909"
        ]
      }, 
      {
        "name": "dimensions_id", 
        "type": "PropertyValue", 
        "value": [
          "pub.1046023341"
        ]
      }
    ], 
    "sameAs": [
      "https://doi.org/10.1007/bf00137909", 
      "https://app.dimensions.ai/details/publication/pub.1046023341"
    ], 
    "sdDataset": "articles", 
    "sdDatePublished": "2019-04-11T13:56", 
    "sdLicense": "https://scigraph.springernature.com/explorer/license/", 
    "sdPublisher": {
      "name": "Springer Nature - SN SciGraph project", 
      "type": "Organization"
    }, 
    "sdSource": "s3://com-uberresearch-data-dimensions-target-20181106-alternative/cleanup/v134/2549eaecd7973599484d7c17b260dba0a4ecb94b/merge/v9/a6c9fde33151104705d4d7ff012ea9563521a3ce/jats-lookup/v90/0000000371_0000000371/records_130814_00000004.jsonl", 
    "type": "ScholarlyArticle", 
    "url": "http://link.springer.com/10.1007/BF00137909"
  }
]
 

Download the RDF metadata as:  json-ld nt turtle xml License info

HOW TO GET THIS DATA PROGRAMMATICALLY:

JSON-LD is a popular format for linked data which is fully compatible with JSON.

curl -H 'Accept: application/ld+json' 'https://scigraph.springernature.com/pub.10.1007/bf00137909'

N-Triples is a line-based linked data format ideal for batch operations.

curl -H 'Accept: application/n-triples' 'https://scigraph.springernature.com/pub.10.1007/bf00137909'

Turtle is a human-readable linked data format.

curl -H 'Accept: text/turtle' 'https://scigraph.springernature.com/pub.10.1007/bf00137909'

RDF/XML is a standard XML format for linked data.

curl -H 'Accept: application/rdf+xml' 'https://scigraph.springernature.com/pub.10.1007/bf00137909'


 

This table displays all metadata directly associated to this object as RDF triples.

73 TRIPLES      21 PREDICATES      31 URIs      19 LITERALS      7 BLANK NODES

Subject Predicate Object
1 sg:pub.10.1007/bf00137909 schema:about anzsrc-for:14
2 anzsrc-for:1402
3 schema:author Nc593739e20a74765a639413e328be34d
4 schema:citation https://doi.org/10.1086/259394
5 https://doi.org/10.1086/260357
6 https://doi.org/10.1111/j.1465-7295.1967.tb01923.x
7 https://doi.org/10.2307/1879604
8 schema:datePublished 1984-01
9 schema:datePublishedReg 1984-01-01
10 schema:description The objective of this paper is to investigate the assertion that a given rent payoff gives rise to an equal value of total expenditure. An analogy with perfect competition suggests a long-run perspective, which would allow the number of players to vary. Accordingly, a game theoretic model of the competitive process where competitors anticipate rival reactions and expend resources to increase their probability of winning is extended to include entry. Long-run quilibrium occurs when the incentive for entry is dissipated, i.e., expected profits equal 0 or the expected rate of return equals the opportunity cost discount rate. When this occurs total expenditure in rent-seeking is found to equal the payoff as in the standard competitive case. How does this result affect Tullock's policy recommendations? His first finding that total expenditures in rent-seeking can be minimized by holding the number of players down remains intact. Essentially, this requirement restricts entry and as a result maintains the short-run conditions indicated by equations (2) and (3) for a given number of firms. His second recommendation, that of increasing the marginal cost of improving a player's probability of winning must, however, be qualified. If the long-run equilibrium is attained total expenditures will equal the payoff regardless of the marginal cost. If the marginal cost is such that the long-run equilibrium is unbounded, there exists a continuous incentive for new entry. It is possible that total expenditures will increase as entry mounts, but this cannot be determined. A policy of increasing the marginal cost will work, however, if carried out in conjunction with a restriction on entry. In this case the short-run results still apply. Finally, an additional policy recommendation can be deduced. From equation (10) total rent-seeking expenditures will be reduced if the opportunity cost discount rate of return is increased. This may be achieved by such actions as increasing the lag between rent-seeking expenditures and the associated payoff, or unfettering alternative productive investments (reduced taxes, deregulation, etc.). Both result in a larger discount of the payoff. The results support the concern with rent-seeking behavior. It indicates that in the long-run each opportunity for rent — a transfer of wealth — displaces an opportunity for the creation of value which will be equal to or greater than the rent payoff. It will be greater, of course, where the investment alternative cannot capture the full social gain.
11 schema:genre research_article
12 schema:inLanguage en
13 schema:isAccessibleForFree false
14 schema:isPartOf N4cc388ef66e04a7b8ca09bf2ab67d529
15 Nccfd9c830e384ee2a5389e11058985dc
16 sg:journal.1027434
17 schema:name Long-run equilibrium and total expenditures in rent-seeking
18 schema:pagination 89-94
19 schema:productId N35e2f018c1244331ba0a6cdd9d6cb630
20 Nac5e32335f63428a82fa6a5b353916b3
21 Ne8aea5875ba54d0d9c6f8232cee93672
22 schema:sameAs https://app.dimensions.ai/details/publication/pub.1046023341
23 https://doi.org/10.1007/bf00137909
24 schema:sdDatePublished 2019-04-11T13:56
25 schema:sdLicense https://scigraph.springernature.com/explorer/license/
26 schema:sdPublisher Nadcce9aa7cfd421db052e0cf2978308f
27 schema:url http://link.springer.com/10.1007/BF00137909
28 sgo:license sg:explorer/license/
29 sgo:sdDataset articles
30 rdf:type schema:ScholarlyArticle
31 N35e2f018c1244331ba0a6cdd9d6cb630 schema:name doi
32 schema:value 10.1007/bf00137909
33 rdf:type schema:PropertyValue
34 N4cc388ef66e04a7b8ca09bf2ab67d529 schema:volumeNumber 43
35 rdf:type schema:PublicationVolume
36 Nac5e32335f63428a82fa6a5b353916b3 schema:name readcube_id
37 schema:value db3ad2db9fb65ac304180084a7f49958ab52115fb1b60a3d7d186858da27e120
38 rdf:type schema:PropertyValue
39 Nadcce9aa7cfd421db052e0cf2978308f schema:name Springer Nature - SN SciGraph project
40 rdf:type schema:Organization
41 Nc593739e20a74765a639413e328be34d rdf:first sg:person.013455267135.45
42 rdf:rest rdf:nil
43 Nccfd9c830e384ee2a5389e11058985dc schema:issueNumber 1
44 rdf:type schema:PublicationIssue
45 Ne8aea5875ba54d0d9c6f8232cee93672 schema:name dimensions_id
46 schema:value pub.1046023341
47 rdf:type schema:PropertyValue
48 anzsrc-for:14 schema:inDefinedTermSet anzsrc-for:
49 schema:name Economics
50 rdf:type schema:DefinedTerm
51 anzsrc-for:1402 schema:inDefinedTermSet anzsrc-for:
52 schema:name Applied Economics
53 rdf:type schema:DefinedTerm
54 sg:journal.1027434 schema:issn 0048-5829
55 1573-7101
56 schema:name Public Choice
57 rdf:type schema:Periodical
58 sg:person.013455267135.45 schema:affiliation https://www.grid.ac/institutes/grid.266815.e
59 schema:familyName Corcoran
60 schema:givenName William J.
61 schema:sameAs https://app.dimensions.ai/discover/publication?and_facet_researcher=ur.013455267135.45
62 rdf:type schema:Person
63 https://doi.org/10.1086/259394 schema:sameAs https://app.dimensions.ai/details/publication/pub.1058572875
64 rdf:type schema:CreativeWork
65 https://doi.org/10.1086/260357 schema:sameAs https://app.dimensions.ai/details/publication/pub.1058573838
66 rdf:type schema:CreativeWork
67 https://doi.org/10.1111/j.1465-7295.1967.tb01923.x schema:sameAs https://app.dimensions.ai/details/publication/pub.1030323183
68 rdf:type schema:CreativeWork
69 https://doi.org/10.2307/1879604 schema:sameAs https://app.dimensions.ai/details/publication/pub.1069623159
70 rdf:type schema:CreativeWork
71 https://www.grid.ac/institutes/grid.266815.e schema:alternateName University of Nebraska at Omaha
72 schema:name Economics Program, University of Nebraska, 68182, Omaha, NE
73 rdf:type schema:Organization
 




Preview window. Press ESC to close (or click here)


...