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Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn >
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http://hdl.handle.net/10419/22961
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| Title: | | Firm Size, Economic Situation and Influence Activities  |
| Authors: | | Kräkel, Matthias |
| Issue Date: | | 2006 |
| Series/Report no.: | | Bonn econ discussion papers 2006,16 |
| Abstract: | | This paper discusses the optimal firm size in the presence of influence activities, and the level of individual rent-seeking dependent on the economic situation of the firm. Since firm size has a discouraging effect on the level of individual rent-seeking but also a quantity effect as the number of rent-seekers increases, the interplay of both effects determines whether the employer chooses an inefficiently small or large firm size. In the given setting, a bad economic situation leads to both a higher probability of a substantial loss and a reduction of productivity. The productivity effect and the two other effects together determine the optimal level of individual rent-seeking. |
| Subjects: | | economic situation firm size influence activities politicking rent-seeking |
| JEL: | | L2 D2 M2 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn
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