Reexamining Efficient Rent-Seeking in Laboratory Markets.

Given E. Millner and M. Pratt's (1989) finding of behavior inconsistent with theory, the authors reexamine efficient rent-seeking in experimental markets. They show that (1) when r = 3, no Nash equilibrium exists and, therefore, behavior has no theoretical benchmark to judge consistency and (2) when r = 1, with a new experimental design utilizing an explicit expected payoff matrix, rent-seeking behavior is consistent with both Nash equilibrium and dissipation hypotheses. Copyright 1991 by Kluwer Academic Publishers