Did you ever see Shawshank Redemption? One of the Warden’s tricks is not just to take construction projects with convict labor, but to bid on any construction project (with the ability to undercut any competitor because his labor is already paid for) unless the other contractors paid him to stay away from that job.
My thought, as hinted at by my last question, is that refusing or accepting any particular blackmail request depends on the immediate and reputational costs of refusing or accepting. A flat “we will not accept any blackmail requests” is emotionally satisfying to deliver, but can’t be the right strategy for all situations. (When the hugger mugger demands “hug me or I’ll shoot!”, well, I’ll give him a hug.) A “we will not accept any blackmail requests that cost more than X” seems like the next best step, but as pointed out here that runs the risk of people just demanding X every time. Another refinement might be to publish a “acceptance function”- you’ll accept a (sufficiently credible and damaging) blackmail request for x with probability f(x), which is a decreasing (probably sigmoidal) function.
But the reputational costs of accepting or rejecting vary heavily based on the variety of threat, what you believe about potential threateners, whose opinions you care about, and so on. Things get very complex very fast.
If I am able to outbid all competitors for any job, but cannot do all jobs, and I let it be known that I won’t bid on jobs if bribed accordingly, I would not consider myself to be threatening all the other contractors, or blackmailing them. In effect this is a form of rent-seeking.
The acceptance-function approach you describe, where the severity and credibility of the threat matter, makes sense to me.
Blackmail seems to me to be a narrow variety of rent-seeking, and reasons for categorically opposing blackmail seem like reasons for categorically opposing rent-seeking. But I might be using too broad a category for ‘rent-seeking.’
reasons for categorically opposing blackmail seem like reasons for categorically opposing rent-seeking
Well, I agree, but only because in general the reasons for categorically opposing something that would otherwise seem rational to cooperate with are similar. That is, the strategy of being seen to credibly commit to a policy of never rewarding X, even when rewarding X would leave me better off, is useful whenever such a strategy reduces others’ incentive to X and where I prefer that people not X at me. It works just as well where X=rent-seeking as where X=giving me presents as where X=threatening me.
Yes but I’m not sure how valuable it is to. Basically, it boils down to ‘non-productive means of acquiring wealth,’ but it’s not clear if, say, petty theft should be included. (Generally, definitional choices like that there are made based on identity implications, rather than economic ones.) The general sentiment of things “I prefer that people not X at me” captures the essence better, perhaps.
There are benefits to insisting on a narrower definition: perhaps something like legal non-productive means of acquiring wealth, but part of the issue is that rent-seeking often operates by manipulating the definition of ‘legal.’
Did you ever see Shawshank Redemption? One of the Warden’s tricks is not just to take construction projects with convict labor, but to bid on any construction project (with the ability to undercut any competitor because his labor is already paid for) unless the other contractors paid him to stay away from that job.
My thought, as hinted at by my last question, is that refusing or accepting any particular blackmail request depends on the immediate and reputational costs of refusing or accepting. A flat “we will not accept any blackmail requests” is emotionally satisfying to deliver, but can’t be the right strategy for all situations. (When the hugger mugger demands “hug me or I’ll shoot!”, well, I’ll give him a hug.) A “we will not accept any blackmail requests that cost more than X” seems like the next best step, but as pointed out here that runs the risk of people just demanding X every time. Another refinement might be to publish a “acceptance function”- you’ll accept a (sufficiently credible and damaging) blackmail request for x with probability f(x), which is a decreasing (probably sigmoidal) function.
But the reputational costs of accepting or rejecting vary heavily based on the variety of threat, what you believe about potential threateners, whose opinions you care about, and so on. Things get very complex very fast.
If I am able to outbid all competitors for any job, but cannot do all jobs, and I let it be known that I won’t bid on jobs if bribed accordingly, I would not consider myself to be threatening all the other contractors, or blackmailing them. In effect this is a form of rent-seeking.
The acceptance-function approach you describe, where the severity and credibility of the threat matter, makes sense to me.
Blackmail seems to me to be a narrow variety of rent-seeking, and reasons for categorically opposing blackmail seem like reasons for categorically opposing rent-seeking. But I might be using too broad a category for ‘rent-seeking.’
Well, I agree, but only because in general the reasons for categorically opposing something that would otherwise seem rational to cooperate with are similar. That is, the strategy of being seen to credibly commit to a policy of never rewarding X, even when rewarding X would leave me better off, is useful whenever such a strategy reduces others’ incentive to X and where I prefer that people not X at me. It works just as well where X=rent-seeking as where X=giving me presents as where X=threatening me.
Can you expand on your model if rent-seeking?
Yes but I’m not sure how valuable it is to. Basically, it boils down to ‘non-productive means of acquiring wealth,’ but it’s not clear if, say, petty theft should be included. (Generally, definitional choices like that there are made based on identity implications, rather than economic ones.) The general sentiment of things “I prefer that people not X at me” captures the essence better, perhaps.
There are benefits to insisting on a narrower definition: perhaps something like legal non-productive means of acquiring wealth, but part of the issue is that rent-seeking often operates by manipulating the definition of ‘legal.’