Cooperation by way of support in a rent seeking contest for a public good

This paper analyzes the efforts made to influence a decision that can have two outcomes. First, the agents on the same side designate an agent to play the contest for them. The inactive agents can then decide to support this active agent, i.e. pay a percentage of his effort. It is optimal to designate either the agent with the lowest stake (who will receive support from everyone else) or the agent with the highest stake (who will not receive support) as the active agent. We find that the side with the higher aggregate stake may have the lower success probability.     

The social cost of rent seeking in Europe

Direct measurement of the social cost of rent seeking is impeded by non-observable and non-reported activities. We use a dynamic stochastic general equilibrium model to compute the social cost of rent seeking in Europe. Our estimate is based on competition among interest groups for privileges provided by governments, including income transfers, subsidies, and preferential tax treatment. The model, which is calibrated to the euro area as a whole and also to individual euro member countries for 1980–2003, performs well vis-à-vis the data. We find that significant proportions of GDP are extracted as rents available to be sought by rent seekers.     

Maximum efforts in contests with asymmetric valuations

Efforts may be reduced when players with different valuations participate in a contest. This paper considers the problem of designing a contest to elicit maximum aggregate effort from players with asymmetric valuations. Optimal designs for different classes of contest technologies are computed and characterized. A value weighted contest is optimal in the concave case. In the unconstrained case, the optimal contest is equivalent to a first price all-pay auction with a reserve price. The optimal design discounts the effort of the high valuation player in order to induce him to compete vigorously.     

Collective rent seeking and division of labor

The article analyzes division of labor within multiple groups engaged in collective rent seeking through time. Each agent seeks membership in one of two subgroups within each group, conveniently labelled a leader-subgroup and a follower-subgroup. The within-group generated payoffs are used as input in the between-group competition for the other groups' payoffs and an external rent. Within-group egalitarian allocation, but not relative-effort allocation, alleviates leadership struggle if the rent is large or the group is moderately more decisive than the other groups. The group employing a more egalitarian sharing rule than the other groups alleviates its leadership struggle more successfully. The Folk theorem is used to show the conditions under which leadership struggle gets intensified or alleviated.     

The allocation of entrepreneurial efforts in a rent-seeking society: Evidence from China

This paper considers four types of entrepreneurial efforts: productive activities, aggressive rent seeking, defense against rent extraction, and leisure. It examines how entrepreneurs allocate efforts when facing dual-dealing relationships with politicians in a rent-seeking society: entrepreneurs not only pursue additional benefits through rent seeking, but also try to avoid extortions by politicians. Using unique city-level and firm-level data across China, we demonstrate that Chinese entrepreneurs survive in a twisted world: ordinary entrepreneurs would desire better institutional environment, but if institutional improvement is not available, they would prefer political connections which are often preoccupied by special interest groups and/or large-sized firms.     

The strategic equivalence of rent-seeking, innovation, and patent-race games

We establish the strategic equivalence of a variety of rent-seeking contests, innovation tournaments, and patent-race games. The results allow us to disentangle negative and positive externalities, and to apply theorems and results intended for rent-seeking games to other games, and vice versa. We conclude with several examples that highlight the practical utility of our results.     

“看病难和看病贵”经济学分析及对策

目前我国城乡居民仍然存在看病难和看病贵的问题,产生这个问题的经济学原因主要有:医疗资源总量供给不足,而且资源的配置极不合理;医疗需求和供给缺乏弹性;医患之间的信息不对称等。在分析原因的基础上提出了相关的政策建议。     

Efficiency and competition in the long run: The survival of the unfit

In a dynamic contest the current incumbent competes against a randomly assigned entrant in a private value all pay auction each period. We focus on equilibria where the beliefs about the incumbent's type and the employed strategies are stationary. We show that inefficient types survive, even if the entrants arrive very frequently, because the entrant plays more aggressively than the incumbent, allowing a low type entrant to win against a high type incumbent. In an example we show that if the incumbent is challenged more often, then the equilibrium type of the incumbent is higher on average. When the value of the prize is the same for all players (the case studied in the public choice literature), the equilibrium rent of the bidders is fully dissipated as the incumbent is challenged infinitely often. The technical contribution lies in showing the existence of stationary equilibrium in an incomplete information game.     

The immiseration of the landlords: rent in a Kaldorian theory of income distribution

This paper incorporates rent within a Kaldorian model of distributionwhere income shares depend on aggregate investment and the propensitiesto save out of profits, rents and wages. The model is used tointerpret the significance of the secular decline in rents asa share of national income and to specify the circumstancesunder which both the capital/output ratio and the wage shareof national income may rise. The author pursues Keynes's suggestiveremarks about land's liquidity value and shows how an increasein the demand for land, by producers, consumers or wealthholdersreduces the rate of profit and therewith the inducement to invest.     

When less is more: Rationing and rent dissipation in stochastic contests

This paper shows how to maximize revenue when a contest is noisy. We consider a case where two or more contestants bid for a prize in a stochastic contest where all bidders value the prize equally. We show that, whenever a Tullock contest yields under-dissipation, the auctioneer?s revenue can be increased by optimally fixing the number of tickets. In particular, in a stochastic contest with proportional probabilities, it is possible to obtain (almost) full rent dissipation. We test this hypothesis with a laboratory experiment. The results indicate that, as predicted, revenue is significantly higher in a lottery with rationing than in a standard lottery. On the other hand, an alternative rationing mechanism that does not limit total expenditures fails to increase revenue relative to a standard lottery.     

Stability in the patent race contest of Lee and Wilde

Summary. To determine how expenditure and profits vary with the number of firms in the patent race contest of Lee and Wilde, it is traditional to impose an ad-hoc stability condition on the best response function. This paper relates the stability condition to the standard myopic adjustment mechanism and shows that a concave hazard rate function with non- increasing hazard rate elasticity is sufficient for the analysis. We provide examples and reveal additional qualitative properties of the Lee and Wilde model. Received: November 15, 1996; revised version: March 25, 1998     

Collective rent seeking and division of labor

The article analyzes division of labor within multiple groups engaged in collective rent seeking through time. Each agent seeks membership in one of two subgroups within each group, conveniently labelled a leader-subgroup and a follower-subgroup. The within-group generated payoffs are used as input in the between-group competition for the other groups' payoffs and an external rent. Within-group egalitarian allocation, but not relative-effort allocation, alleviates leadership struggle if the rent is large or the group is moderately more decisive than the other groups. The group employing a more egalitarian sharing rule than the other groups alleviates its leadership struggle more successfully. The Folk theorem is used to show the conditions under which leadership struggle gets intensified or alleviated.     

Overbidding and overspreading in rent-seeking experiments: Cost structure and prize allocation rules

We study experimentally the effects of cost structure and prize allocation rules on the performance of rent-seeking contests. Most previous studies use a lottery prize rule and linear cost, and find both overbidding relative to the Nash equilibrium prediction and significant variation of efforts, which we term ‘overspreading.’ We investigate the effects of allocating the prize by a lottery versus sharing it proportionally, and of convex versus linear costs of effort, while holding fixed the Nash equilibrium prediction for effort. We find the share rule results in average effort closer to the Nash prediction, and lower variation of effort. Combining the share rule with a convex cost function further enhances these results. We can explain a significant amount of non-equilibrium behavior by features of the experimental design. These results contribute towards design guidelines for contests based on behavioral principles that take into account implementation features of a contest.     

股权再融资、盈余管理与大股东的寻租行为

我国上市公司处于大股东的超强控制状态,大股东与中小股东之间存在严重的信息不对称,导致大股东在股权再融资过程中表现出强烈的盈余管理动机.本文研究了我国资本市场参与者的行为与盈余管理之间的关系,并分析了对资本配置效率的影响效应.大股东通过操纵报告盈余来改变会计盈余的时间分布和误导投资者,从而攫取更多的隐性收益,造成资本市场配置效率的降低.研究结果表明:(1)大股东通过盈余管理在股权再融资过程中可以获得中小股东无法得到的隐性收益;(2)大股东的收益随着盈余管理程度的增加而提升,中小股东的财富随着盈余管理程度的增加而降低;(3)盈余管理程度的增加将降低上市公司的资本配置效率和企业价值.因此,大股东通过盈余管理实现了对小股东财富的掠夺效应,造成了上市公司资本配置效率、公司价值、声誉和后续融资能力的下降.     

The impact of recall periods on reported morbidity and health seeking behavior

Between 2000 and 2002, we followed 1621 individuals in Delhi, India using a combination of weekly and monthly-recall health questionnaires. In 2008, we augmented these data with another 8 weeks of surveys during which households were experimentally allocated to surveys with different recall periods in the second half of the survey. We show that the length of the recall period had a large impact on reported morbidity, doctor visits; time spent sick; whether at least one day of work/school was lost due to sickness and; the reported use of self-medication. The effects are more pronounced among the poor than the rich. In one example, differential recall effects across income groups reverse the sign of the gradient between doctor visits and per-capita expenditures such that the poor use health care providers more than the rich in the weekly recall surveys but less in monthly recall surveys. We hypothesize that illnesses – especially among the poor – are no longer perceived as “extraordinary events” but have become part of “normal” life. We discuss the implications of these results for health survey methodology, and the economic interpretation of sickness in poor populations.     

Direct causal mechanisms of profit: dominant paradigm of profit seeking

This paper develops the direct causal mechanisms of profit (DCMP) to meet the conditions/requirements normatively drawn from the conceptual, logical and methodological dimensions of profit seeking, direct causal mechanisms, holistic and non-egalitarian approach, and deductive inference, which holds the proximate causal mechanism between technological change and needs evolution at the macro-foundations, and the ultimate causal mechanism between needs-focused innovation and explicit needs at the micro-foundations. From DCMP it derives propositions about matching goodness of the proximate causal mechanism and adaptive goodness of the ultimate causal mechanism, verifies them with the experiences of the winners/losers, and finally concludes that DCMP can work as the dominant paradigm of profit seeking, the determinants of firm/business success, and a powerful theoretical and practical foundation/framework for business model design and innovation, asserting that DCMP explains profit as outcome/effect in a more robust/comprehensive/persuasive manner than the existing paradigms because DCMP always guarantees the genuine causality.     

Political Economy of Industrial Development in Vietnam’s Telecommunications Industry: A Rent Management Analysis

This article contributes to the current debate in economics on the uses and benefits of rents and rent seeking. On the one hand, public choice and neoliberal scholars highlight the redistributive and damaging aspects of rent seeking, thus rendering the policy suggestion to completely eradicate rents and rent seeking in an economy. On the other hand, institutional and development economists point out the inherent theoretical inconsistencies shown in the earlier models, and suggest that certain types of rent and rent seeking could be growth-enhancing. Using the Developmental Rent Management Analysis, this article assesses the industrial development of the telecommunications industry in Vietnam using two case studies. Qualitative research points out a number of rent management factors contributing both to the industry’s failure before the early 2000s and its subsequent success thereafter. The successful development of the telecommunications industry was fundamentally based on (i) favorable political support for rent creation, (ii) an effective structure of rent allocation and implementation, and (iii) credible incentives and pressures that encouraged local firms’ industrial upgrading. The Vietnamese experience suggests that rents can be developmental, conceivably side-by-side with rent seeking, cronyism and corruption.     

赵靖的中国经济思想史研究历程及学术贡献

赵靖先生是中国经济思想史学科的主要开拓者和奠基人.在半个多世纪的研究生涯中,他拓展了中国经济思想史的研究内容,提出了中国经济思想史特有的研究模式,构建了科学的学科研究体系.赵靖先生的中国经济思想史研究之路是20世纪后半期中国经济思想史学科发展的缩影.     

Extending perfect timing theory: not just one but several windows of opportunity

ABSTRACT

A recent study investigated the optimal time to enter emerging industries, introducing the existence of a window of opportunity for firms. The present study doubted its validity in a situation labeled as ‘long-tail industry life-cycle’. It is proposed that the concept ‘window of opportunity’ could be valid also in long-tail industry life-cycle situations, but that in these cases several windows of opportunity could emerge, at the subsystem or component level, after the establishment of a dominant design at the product level. The crux of the problem, as detailed in the rest of the paper, is represented by product architecture.