The paper provides a tractable, analytical framework to study regulatory risk. Regulatory risk is captured by uncertainty about the policy variables in the regulator's objective function: weights attached to profits and costs of public funds. Results are as follows: 1) The regulator's reaction...

This paper highlights the potential for joint OECD (or non-OPEC) carbon taxes to reduce OPEC's monopoly rent and provide benefit to non-OPEC countries provided jointly agreed trigger strategies are adhered to. In traditional economic theory, the primary purpose of a carbon tax is to internalize...

Combining a spatial equilibrium model with a matching unemployment model, this paper analyzes the regional quality of life when wages, rents, and unemployment risk compensate for local amenities and disamenities. In particular, the paper shows for quasi-linear utility that the effects of any...

If a free trade agreement (FTA) is characterized by the exchange of market access with a large and competitive trading partner, the agreement can cause a leakage of protectionist benefits to domestic industry from lobbying against external tariff cuts. This rent destruction effect of an FTA can...

Our goal is to examine the income inequality and welfare effects of the direct distribution of resource rents and subsequent taxation in Iran. We use rich micro survey data covering more than 36,000 Iranian households in 2009. Our micro-simulations show that the direct distribution of resource...

We study the association between resource rents and political stability, highlighting the importance of the distribution of political power as a mediating factor. We present a simple theoretical model showing that increased rents are likely to be positively associated with the stability of a...

We study ex post information rents in sequential screening models where the agent receives private ex ante and ex post information. The principal has to pay ex post information rents for preventing the agent to coordinate lies about his ex ante and ex post information. When the agent's ex ante...

In a remarkably simple and yet in one of the most original and insightful observations of 20th century economics, Gordon Tullock observed that there are efficiency losses when public policies and political behavior create contestable rents. Tullock also observed that social losses from...

Beginning in the mid-seventeenth century, England changed its system of raising revenues from tax farming, combined with the granting of monopolies, to direct collection within the government administration. Rents were then transferred from tax farmers and monopolists to the central government...