Rent-seeking with scarce talent: a model of preemptive hiring

In the standard model of a rent-seeking contest, firms optimally employ resources in an attempt to win the contest and obtain the rent. Typically, it is assumed that these resources may be hired at any desired level at some fixed, exogenous per-unit cost. In many real-world rent-seeking contests, however, these resources consist of scarce, talented individuals. We model a rentseeking contest in which the talent available for employment is scarce and in which the rent obtained from winning the contest may also differ from participant to participant. Talent scarcity leads to preemptive hiring by the player receiving the larger rent. In the traditional analysis, as the size of the rents converges, the levels of effort and the probability of winning also converge. By contrast, when talent is scarce, the player receiving the larger rent hires it all and wins the contest with probability 1. This is true even if the difference in rents is small. Interestingly, this outcome may be Pareto-inferior to the outcome associated with the interior Nash equilibrium. We also characterize the condition under which talent ceases to be scarce. For a simple rentseeking game, this requires at least 50% more talent than is employed at the interior Nash equilibrium.rent-seeking, scarce talent, labor market, lobbying, preemptive hiring

A note on duplication of R&D and R&D subsidies

We show that the presumed incompatibility of uncoordinated R&D and competition is not fundamental, but hinges on the nature of R&D spillovers. As a consequence, R&D subsidies may be more effective than previously thought.Duplication

The Role of R&D Technology in Asymmetric Research Joint Ventures

We characterize asymmetric equilibria in two-stage process innovation games and show that they are prevalent in the different models of R&D technology considered in the literature. Indeed, cooperation in R&D may be accompanied by high concentration in the product market. We show that while such an increase may be profitable, it may be socially inefficient.Research and Development, Research Joint Ventures, Process Innovation Games

A note on duplication of RD and RD subsidies

We show that the presumed incompatibility of uncoordinated RD and competition is not fundamental, but hinges on the nature of RD spillovers. As a consequence, RD subsidies may be more effective than previously thought

Direct perturbations of aggregate excess demand

We establish that an exchange economy, i.e., preferences and endowments, that generates a giiven aggregate excess demand (AED) function is close to the economy generating the AED obtained by an arbitrary perturbation of the original one.Arrow-Debreu, transversality, exchange economy.

Rent-Seeking With Scarce Talent: A Model of Preemptive Hiring

In a standard rent-seeking contest, players optimally employ resources in an attempt to obtain the rent. Typically, it is assumed that these resources may be hired at any desired level at some exogenous per-unit cost. In practice, these resources often consist of scarce, talented individuals. We model a rent-seeking contest with scarce talent and find that talent scarcity leads to preemptive hiring by the player receiving the larger rent. This player hires all available talent and wins the contest with probability 1. This is true even when the difference in rents is small

An Extension of the Trade Restrictiveness Index to Large Economies

URL des Cahiers : https://halshs.archives-ouvertes;fr/CAHIERS-MSECahiers de la MSE 2004.53 - Série Bleue - ISSN : 1624-0340The Trade Restrictiveness Index (TRI) introduced by Anderson and Neary (1994) provided the first theoretically satisfying measure of a country's tariff structure by overcoming the problem of ad hoc specification of indexing weights and the related index number problem. We observe, however, that the TRI may not exist or may not be unique when countries are large. As a remedy, we propose a simple extension.Le " Trade Restrictiveness Index " (ou Indice de Restriction du Commerce) proposé par Anderson et Neary (1994) parvient à surmonter le problème des indices et à éviter une spécification ad hoc des pondérations des tarifs. Nous observons néanmoins que cet indice souffre d'un problème de non-unicité ou de non-existence quand l'économie en question est large. Une extension de l'indice peut remédier à ce problème