A rent-seeking coalition and efficiency losses
Date
2025-07
Authors
Spialtini, Valentin
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Einstoss Mastracchio, Sebastián Nicolás
Journal Title
Journal ISSN
Volume Title
Publisher
Universidad de San Andrés. Departamento de Economía
Abstract
This paper develops a theoretical model to analyze the efficiency losses caused by rent-seeking coalitions that, protected by institutional arrangements, block the entry of more productive firms into the market. Once entry is deterred, the coalition endogenously chooses to operate with a suboptimal level of productivity —even in the absence of adoption costs— in order to maximize internal rents. We calibrate the model and show that aggregate output is strictly lower under the monopoly equilibrium. To illustrate the empirical relevance of the mechanism, we examine two case studies from Argentina’s transport sector. We provide evidence that truck drivers earn a wage premium relative to comparable formal workers, and that Aerolíneas Argentinas increased productivity and reduced government support when exposed to greater competition.
Description
Fil: Spialtini, Valentin. Universidad de San Andrés. Departamento de Economía; Argentina.