If you regret having missed your chance to learn about rent seeking
the costly (and therefore more memorable) way, why don't you take your
chances on one of many popular penny auction
sites? As a customer, you pay a non-refundable fee to place a bid on an
item. Your bid increases the bid-price of the item by one penny. When
time is up, the winner pays his bid price, and the auction site collects
that price in addition to $0.75 per bid. For example, if an auction for
a $25 amazon gift card closes at $10.36, the site collects $756.28
(1036 bids costing $0.75 each and $10.36 for the final bid).
At
least this auction model, like Professor Coppock's dollar auction, is a
profitable one. Rent (or, more specifically, low-priced electronics)
seeking behavior is costly to the seeker, but it isn't costly to society
as a whole. The marginal cost of producing a bid is zero, and if
something that is free to produce sells for almost a dollar, the
purchase acts, at worst, as a transfer payment.
If,
instead of paying for a bid, the rent (or, more specifically, political
office) seeker had to pay to print and send me a flyer with a picture of
his face on it (oh, Mitt...), that activity would have more of the
detrimental effects of rent-seeking. That $0.75 would be destroyed wealth, a pure dead weight loss to the economy.
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