We investigate whether expectations that are not fully rational have the potential to explain the evolution of house prices and the price-to-rent ratio in the United States. First, a stylized asset-pricing model solved under rational expectations is used to derive a fundamental value for house prices and the price-rent ratio. Although the model can explain the sample average of the price-rent r...

Rent-Sharing, Hold-up, and Wages: Evidence from Matched Panel Data It is widely believed that rent-sharing reduces the incentives for investment when long term contracts are infeasible because some of the returns to sunk capital are captured by workers. We propose a simple test for the degree of hold-up based on the fraction of capital costs that are deducted from the quasi-rent that determines...

Firm Size, Economic Situation and Influence Activities This paper discusses the optimal firm size in the presence of influence activities, and the level of individual rent-seeking dependent on the economic situation of the firm. Since firm size has a discouraging effect on the level of individual rent-seeking but also a quantity effect as the number of rent-seekers increases, the interplay of b...

We study the benefits of private entrepreneurs entering into politics in China. Using original hand-collected data on political participation of entrepreneurs that control listed firms, we document evidence of rent seeking through their political networks and several potential channels through which rent seeking is realized. It is shown that political participation results in increased stock pe...

This article analyzes an asymmetric rent-seeking contest with free riding where valuation on the prize (rent) and effectiveness of rent-seeking effort may differ among agents and the victory of an agent may not exclude some agents other than the winner of the contest to consume the prize of the contest. After proving the unique existence of pure-strategy Nash equilibrium, this article examines ...

There can be three types of heterogeneity among players in a rent-seeking contest. First, the efectiveness of agent's efort on the winning probabilities may difer among players. Secondly, players may evaluate the rent or prize of the rent-seeking contest diferently. Thirdly, players may face diferent financial constraints. Without assuming that each player’s production function for loteries is ...

This paper studies the wasteful effect of bureaucracy on the economy by addressing the link between rent-seeking behavior of government bureaucrats and the public sector wage bill, which is taken to represent the rent component. In particular, public officials are modeled as individuals competing for a larger share of those public funds. The rent-seeking extraction technology in the government ...

We give the classification of 3-dimensional Bol algebras associated to the trilinears operations (e2, e3, e2) = e1 ; (e2, e3, e3) = ±e2. It turn that for such trilinears operation there exist up to isomorphism and isotopy one family and one exceptional Bol algebras. We describe their associated 3-webs.

The rent of shelter accounts for approximately a third of the Consumer Price Index (CPI). Using a new housing rent index (RRI) developed by Ambrose, Coulson, and Yoshida (2014), we modify the CPI and compute the Taylor rule for the period from 2000 to 2010. With this timely rent index, Taylor rule becomes more consistent with the Federal funds rate than the conventional calculations. However, t...