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Technological Progress and Rent Seeking.

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Titel: Technological Progress and Rent Seeking.
Autoren: Glode, Vincent1 (AUTHOR), Ordoñez, Guillermo1 (AUTHOR)
Quelle: Review of Financial Studies. Apr2025, Vol. 38 Issue 4, p1259-1289. 31p.
Schlagwörter: *TECHNOLOGICAL progress, *RENT seeking, *RESOURCE allocation, *BUSINESS enterprises, *SURPLUS (Economics), *PROFIT
Abstract: We model firms' allocation of resources across surplus-creating (ie, productive) and surplus-appropriating (ie, rent-seeking) activities. Our model predicts that industry-wide technological advancements, such as recent progress in data collection and processing, induce a disproportionate and socially inefficient reallocation of resources toward surplus-appropriating activities. As technology improves, firms rely more on appropriation to obtain their profits, thereby endogenously reducing the impact of technological progress on economic progress and inflating the price of the resources used for both types of activities. Our theoretical insights shed light on the rise of high-frequency trading. [ABSTRACT FROM AUTHOR]
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Datenbank: Business Source Index
Beschreibung
Abstract:We model firms' allocation of resources across surplus-creating (ie, productive) and surplus-appropriating (ie, rent-seeking) activities. Our model predicts that industry-wide technological advancements, such as recent progress in data collection and processing, induce a disproportionate and socially inefficient reallocation of resources toward surplus-appropriating activities. As technology improves, firms rely more on appropriation to obtain their profits, thereby endogenously reducing the impact of technological progress on economic progress and inflating the price of the resources used for both types of activities. Our theoretical insights shed light on the rise of high-frequency trading. [ABSTRACT FROM AUTHOR]
ISSN:08939454
DOI:10.1093/rfs/hhae031