Abstract
This paper establishes three analytical propositions that measure the aggregate resources wasted by firms competing in a rent-seeking contest. The propositions are derived from a model of monopoly rent-seeking where firms are assumed to compete in a contest in which the outcome is determined probabilistically. The model embodies an assumption that the rent-seeking rivals are differentially situated in terms of the ease with which monopoly can be obtained. The paper considers a special case where an incumbent in a monopoly franchise conferred by a governmental body enjoys a unique comparative advantage in the effectiveness of its rent-seeking expenditures. In that case it is shown, inter alia, that the maximum value of the monopoly rent dissipated by all the rent-seeking rivals can be measured with reasonable accuracy if the number of rivals and the marginal advantage of the incumbent are known or can be reliably estimated.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
