Assignment Task: In many large U.S. cities, monopoly owners of sports franchises have been lobbying local governments for new publicly financed sports stadiums. Is this a form of rent seeking?
Go to Heartland Institute's Web site, conduct a search for sports stadiums, and look at one of the documents collected there.
- Is there convincing evidence of rent seeking?
What Is Rent-Seeking?
"Rent-seeking happens when a person or business uses their position or resources to get some additional benefit from the government. The most common occurrence is when a company or industry lobbies the government to receive special subsidies, grants, and tariff protection. The term "rent" in economics means receiving a payment that is over the costs involved in the production of the item or keeping the item in service. These actions do not produce any benefit for the community-at-large but only redistribute taxpayer's resources" - from Investopedia to help with assignment.
- If so, how does that relate to the welfare cost of monopoly?