On Rent

Rent Control

An experiment on sequential rent-seeking

In an experiment on sequential rent seeking, we find that the theoretically predicted first-mover advantage does not exist empirically. Rather, a second-mover advantage can be observed. Though the subgame perfect equilibrium can not prevail in experiment, individual behavior is highly reasonable nevertheless, such that subjects appear to play a reduced form of the original game. We also observe...

Fair Rent Division on a Budget

The standard approach to fair rent division assumes that agents have quasi-linear utilities, and seeks allocations that are envy free; it underlies an algorithm that is widely used in practice. However, this approach does not take budget constraints into account, and, therefore, may assign agents to rooms they cannot afford. By contrast, we design a polynomial-time algorithm that takes budget c...

On the Allocative Effects of Rent Seeking

We consider the effects of rent-seeking activities on resource allocation. Before rent-seeking activities take place, there are prior probabilities that an object will be given to one of several agents. The posterior probability depends on prior probabilities and the expenses incurred by all agents. In the case of two agents who equally value the object, prior and posterior probabilities coinci...

Rent-setting in multiple winner rent-seeking contests

In this paper, we analyze a multiple winner rent-seeking contest where the number of winners is set by a self-interested regulator. The winners receive a license to compete in a market. The structure of competition in the market influences the number of winners through the preferences of the regulator. The model indicates that Cournot competitors can be better off than firms that are able to co...