Efficient Rent-Seeking in Experiment

In a series of experiments we show that people learn to play the efficient outcome in an open-ended rent-seeking game. This is a consistent result which prevails despite quite different experiment en-vironments and designs, like different propensities of competition, group sizes etc. This is in strik-ing contrast to other (not only) rent-seeking experiments where people do not behave as theoreti-cally predicted, and resolves the so-called Tullock paradox which states that real world rent-seeking expenditures are much lower than the standard rent-seeking model predicts.

Vogt, Carsten, Joachim Weimann and Chun-Lei Yang (1997), Efficient Rent-Seeking in Experiment, Diskussionspapier der Fakultät für Wirtschaftswissenschaft (FWW) der Otto-von-Guericke Universität, Magdeburg