Rent Seeking and Welfare Cost of Monopoly Analysis
Description
In many large U.S. cities, monopoly owners of sports franchises have been lobbying local governments for new publicly financed sports stadiums. Is this a form of rent seeking?
Go to Heartland Institutes Web site (Links to an external site.), conduct a search for sports stadiums, and look at one of the documents collected there.
– Is there convincing evidence of rent seeking?
What Is Rent-Seeking?
“Rent-seeking happens when a person or business uses their position or resources to get some additional benefit from the government. The most common occurrence is when a company or industry lobbies the government to receive special subsidies, grants, and tariff protection. The term “rent” in economics means receiving a payment that is over the costs involved in the production of the item or keeping the item in service. These actions do not produce any benefit for the community-at-large but only redistribute taxpayer’s resources” – from Investopedia to help with assignment.
– If so, how does that relate to the welfare cost of monopoly?
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