Rent seeking

Definition

Rent seeking is defined as the expenditure of economic resources by economic actors in order to increase their economic share of a transaction, without increasing the overall economic welfare. Rent seeking is thus bad for the economy as a whole.

Types of rent seeking

• Corporations and interest groups lobbying the government often ends up being rent seeking.
• Non-price competition is a form of rent seeking where buyers expend resources while competing to buy a scarce commodity.