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Rent-seeking for a risky rent: a model and experimental investigation (RV of 98/99/TM)

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Rent-seeking models have been used to predict and explain a wide variety of political decisions. This paper extends Tullock's classic rent-seeking model to the case of a risky rent. The authors derive equilibrium and comparative static predictions from our extended model and present the results of an experiment with subjects from the US and Turkey to test it. Results are consistent with the comparative static predictions of the model, although they observe significantly more absolute levels of rent-seeking than the model predicts, consistent with previous experimental results. They conclude by discussing implications of their results for a variety of rent-seeking settings.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2004/2004-49.pdf

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Copyright INSEAD. All rights reserved