(DP 1993-07) Rent Intensity and Economic Performance

Abstract

Using the share society as a metaphor for the economic system, we construct a microfoundation for stylized observations about rent seeking and economic performance. We introduce the concept of rent intensity and show that a symmetric Cournot-Nash equilibrium it falls as value-adding productivity rises, rises with rent seeking reward and with number of participants. A rudimentary dynamic counterpart is constructed which delivers progressive impoverishment as population grows.