Rent-seeking (Noun)
Meaning
(economics) the theory that a person or firm seeks to make money by manipulating the economic environment rather than by making a profit through production or trade.
Classification
Nouns denoting cognitive processes and contents.
Examples
- The company's efforts to lobby for stricter regulations on its competitors were seen as a classic example of rent-seeking behavior.
- Critics argued that the pharmaceutical industry's focus on patent trolling was a form of rent-seeking that stifled innovation and drove up costs.
- The economist argued that the government's decision to grant a monopoly on the telecommunications industry was an invitation for rent-seeking behavior.
- The company's decision to invest in a team of lobbyists rather than in research and development was seen as a sign of its rent-seeking strategy.
- The theory of rent-seeking suggests that firms will often prioritize manipulating the regulatory environment to their advantage over investing in productive activities.