RENT SEEKING AND SOCIAL INVESTMENT IN TASTE CHANGE

Joel M. Guttman, Shmuel Nitzan, Uriel Spiegel

Research output: Contribution to journalArticlepeer-review

25 Scopus citations

Abstract

We study the social allocation of resources to the alteration of preferences. Such taste changes are Pareto‐preferred if, according to both the original and the new taste regime, the resource allocation resulting from the taste change constitutes an improvement. According to this criterion, a degree of altruism is in general Pareto‐preferred, because it reduces socially wasteful activities, such as lobbying, bargaining and other rent seeking activities designed to increase one agent's expected share of the contested rent. We present a stylized model that captures the role of education in generating altruism and thus reducing the expenditure on rent seeking.

Original languageEnglish
Pages (from-to)31-42
Number of pages12
JournalEconomics and Politics
Volume4
Issue number1
DOIs
StatePublished - Mar 1992

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