Abstract There is increasing consensus that modern capitalist economies suffer from excessive rent extraction in both financial and real economy sectors. However, scholars have yet to develop a coherent analytical framework for identifying the common characteristics of economic rents. In particular, there has been little attention paid distinguishing ‘good’ rents—key innovation growth—from ‘bad...

It is widely believed that an oil weapon could impose scarcity upon the United States. Impending resource exhaustion is thought to exacerbate this threat. However, threat seems implausible when we consider strategic deficits of prospective weapon users and the improbability of impending resource exhaustion. Here, we explore a hypothesis relating oil to national security under a different assump...

Recent results in mechanism design show that as long as agents have correlated private information and are sufficiently risk neutral, it is possible to design mechanisms that leave agents with arbitrarily small information rents. We show that these full-rent-extraction results hinge on the implicit assumption that the agents’ beliefs uniquely determine their preferences. We present an example o...

This chapter explores the extent to which an innovator is able to capture innovation rents. After examining the two main drivers of such rents, the strength of the appropriability regime and the ownership of specialized complementary assets, the chapter examines how their interaction is so critical in affecting imitation, commercialization options, and firm performance. After reviewing the unde...

The diffusion of innovations is supposed to dissipate inventors’ rents. Yet in many documented cases, inventors freely shared knowledge with rivals, including in steam engines, iron and steel production and textile machinery. Using a model and case studies, this paper explores why sharing did not eliminate inventors’ incentives. Each new technology coexisted with an alternative for one or more ...

Large di erences in hourly compensation exist between the natives (urban hukou holders) and rural to urban migrants of the Chinese cities, a third of which cannot be explained by any variation in observable characteristics. This paper attempts to explain the di erences using a Tiebout-esque political economy model of migration in which rents are appropriated from the migrants by the rent-seekin...