ECON1002 Lecture Notes - Lecture 20: Social Choice Theory, Rent-Seeking, Public Choice
Document Summary
What is a rent: rent has multiple meanings in economics, unearned income e. g. from having monopoly rights granted by the gov to an oasis (monopoly rents). Rent seeking: rent seeking is activity devoted to trying to capture rents of the abve form, for example, spending money, time, and effort to convince a government to grant you an import license. Eg: a dossier: rent seeking is unproductive from society"s point of view: resources are spent acquiring other resources no new resources are generated. Expend resources trying to get already existing resources. A large portion of the asset value is dissipated in rent seeking activities (namely people spending money to apply for the contract). Bc we had this system where multiple people can apply but only one can get the contract -we lost a 3rd of the value of the asset just in the poor bidding for the contract.
