Firm Size, Economic Situation and Influence Activities

Arbeitspapier

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 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bonn Econ Discussion Papers ; No. 16/2006

Classification and Topics

• Classification: Wirtschaft
• Subject: economic situation ; firm size ; influence activities ; politicking ; rent-seeking

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kräkel, Matthias
• Event: Veröffentlichung
• (who): University of Bonn, Bonn Graduate School of Economics (BGSE)
• (where): Bonn
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/22961
• Last update: 10.03.2025, 11:43 AM CET