%0 Report
        %A Kräkel, Matthias
        %T Firm Size, Economic Situation and Influence Activities
        %D 2006
        %8 2006 Oct
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 2391
        %U https://www.iza.org/publications/dp2391
        %X 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 firm 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.
        %K economic situation
%K firm size
%K influence activities
%K politicking
%K rent-seeking