Rent extraction, principal-agent relationships, and pricing strategies: vendor licensing during the 1996 Olympic Games in Atlanta

Two-part pricing, price-discrimination, rent creation and extraction, principal-agent theory, and public choice perspectives on public bureaucracies are used to interpret a vendor-license marketing arrangement and controversy arising out of the 1996 Olympic Games in Atlanta, GA. Containing features predicted by principal-agency theory, Atlanta's arrangement with its marketing agent was a response to the behavior of public bureaucracies and a low cost method of converting visitors' consumer surplus to rent, which could be extracted by the marketing agent and then by Atlanta. Atlanta's incentive to enforce vendor property rights was influenced by the nature of the game between Atlanta and prospective vendors. Copyright © 2001 John Wiley & Sons, Ltd.