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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 749:
Rent Seeking and Organizational Structure

Karl Wärneryd ()

Abstract: A hierarchically structured rent-seeking contest may be associated with lower equilibrium expenditure than a corresponding flat contest. In this chapter we discuss how this fact may be used to explain the structure of organizations such as firms, including why firms commonly have outside owners.

Keywords: rent seeking; contests; hierarchy; ownership of firms; (follow links to similar papers)

JEL-Codes: D23; D74; G32; G34; L22; (follow links to similar papers)

16 pages, June 2, 2014

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