Template-Type: ReDIF-Paper 1.0
Title: Firm Size, Economic Situation and Influence Activities
Author-Name: Matthias Kräkel
Author-Email: m.kraekel@uni-bonn.de
Classification-JEL: D2, L2, M2
Keywords: economic situation; firm size; influence activities; politicking; rent-seeking
Abstract: This paper discusses the optimal firm size in the presence of influence activities, and the level of individual rent-seeking dependent on 
	the economic situation of the firm. Since size has a discouraging effect on the level of individual rent-seeking but also a quantity effect as the 
	number of rent-seekers increases, the interplay of both effects determines whether the employer chooses an inefficiently small or large firm size. 
	In the given setting, a bad economic situation leads to both a higher probability of a substantial loss and a reduction of productivity. 
	The productivity effect and the two other effects together determine the optimal level of individual rent-seeking.
Note: 
Length: 25
Creation-Date: 2006-09	
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse16_2006.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse16_2006