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
- Rent-seeking by corporations often involves lobbying for favorable regulations or government contracts that give them an unfair competitive advantage.
- In the 1980s, the rise of crony capitalism in many countries led to widespread rent-seeking behavior among well-connected business elites.
- The government's decision to impose strict licensing requirements on the industry created a rent-seeking opportunity for existing firms to block new entrants.
- Rent-seeking activities can lead to a misallocation of resources and reduced economic efficiency as firms focus on unproductive lobbying efforts rather than innovation and entrepreneurship.
- Critics argue that the current patent system can encourage rent-seeking behavior among large corporations, which use their wealth and influence to accumulate and enforce patents rather than to promote genuine innovation.