Introduction to 'Rent-seeking behavior Assignment

Introduction to 'Rent-seeking behavior - Assignment Example The elderly, for instance, look for higher social security payments. Unluckily, where rights over property are weakened as well as where someone’s ownership of goods or wealth becomes debatable, other individuals could acquire more through attempts to appropriate such wealth than through manufacturing themselves. Such behavior is known as rent seeking (Forbes, 2013). There is no good reason as to why economists use this term â€Å"rent†. It means payments to a production factor in excess of the amount needed to keep the factor within its current use. The word is used to illustrate government lobbying by individuals in order to achieve special privileges. It can be called privilege seeking (Dutton, 2014). Other examples of rent seeking include: the limitation of access to profitable occupations as in modern certifications as well as licensures. Taxi licensing happens to be referenced as a rent seeking instance. Licenses issuing limits the overall tax services supply (instead of making sure of equality or competence) threatening rivalry in livery vehicles, illegal taxes or unregulated taxes causes the taxi service transactions a compulsory transfer of a fraction of the payment from consumers to operators of taxi business. The rent seeking concept may as well apply to bureaucrats’ corruption in their splitting as well as extracting rent/bribe for their application of legal, however, optional for awarding the illegitimate or legitimate benefits to their clients. Tax officials may happen to receive bribes for having reduced tax payers’ tax burden for instance (Dutton, 2014). It has been well known that individuals lobby the government for some privileges. The insight of Tullock was that privilege lobbying expenditures are high and they dissipate gains to the recipients and lead to inefficiency. For instance, a firm that deals with steel