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RENT SEEKING AND SOCIAL INVESTMENT IN TASTE CHANGE *
Author(s) -
Guttman Joel M.,
Nitzan Shmuel,
Spiegel Uriel
Publication year - 1992
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.1992.tb00053.x
Subject(s) - stylized fact , taste , economics , microeconomics , altruism (biology) , pareto principle , rent seeking , investment (military) , social preferences , resource allocation , social psychology , psychology , market economy , operations management , political science , neuroscience , politics , law , macroeconomics
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.