Stefanadis, C., "Economic Progress, Product Differentiation, and the Rent-Seeking Sector."

Title: "Economic Progress, Product Differentiation, and the Rent-Seeking Sector"

Speaker: Professor Christodoulos Stefanadis, University of Piraeus

Host:  Assistant Professor Efthymios Athanasiou, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

Room:  76, Patission Str., Derigny Wing, 4th floor, Room D4

Abstract: We present a model of monopolistic competition where a seemingly unrelated factor, consumer preferences regarding product differentiation, may generate political economy effects.  We examine the interplay between responsive consumer preferences (or an elasticity of substitution sensitive to market conditions) and endogenous output protection that depends on the aggregate ratio of appropriation firepower to productive output.  Then, the proliferation of differentiated varieties that is brought about by economic progress may alleviate rent-seeking and strengthen effective output protection against appropriation.  Economic progress may also increase the size of each productive firm relative to the size of a rent-seeking firm.