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.
Dokumententyp: | Paper |
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Keywords: | economic situation, firm size, influence activities, politicking, rent-seeking |
Fakultät: | Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > B4 - Die Gestaltung von Turnieren im Rahmen der Corporate Governance |
Themengebiete: | 300 Sozialwissenschaften > 330 Wirtschaft |
JEL Classification: | D2, L2, M2 |
URN: | urn:nbn:de:bvb:19-epub-13384-2 |
Sprache: | Englisch |
Dokumenten ID: | 13384 |
Datum der Veröffentlichung auf Open Access LMU: | 10. Jul. 2012, 13:09 |
Letzte Änderungen: | 04. Nov. 2020, 12:53 |