Economists and Interest Groups

A collection of vocabulary flashcards based on the key concepts from the lecture on interest groups in economics.

Interest groups

Organizations of people sharing a common interest that seek to influence political or economic outcomes.

Rent-seeking

The practice of individuals or groups to spend resources to gain economic advantages through manipulation of the political environment.

Welfare losses

Economic losses resulting from inefficiencies in market outcomes.

Rent dissipation

The reduction in rents achieved due to competition among rent-seekers.

Equilibrium

A state in which supply and demand are balanced, resulting in stable prices.

Monopoly

A market structure where a single seller controls the entire supply of a product or service.

Barriers to entry

Obstacles that make it difficult for new competitors to enter a market.

Methodological individualism

The principle that social phenomena can be explained by considering the actions and decisions of individuals.

Utility maximization

The assumption that individuals make choices aimed at maximizing their satisfaction or benefits.

Public good

A good that is non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from use and use by one individual does not reduce availability to others.

Political scientists

Scholars who study politics, government systems, and political behavior.

Positive theory

A theory that focuses on describing and explaining phenomena without making normative judgments.

Normative theory

A theory that prescribes how things should be, reflecting opinions and values.

Coalition

A group of individuals or organizations that come together to achieve a common goal.

Distributional coalitions

Groups formed to pursue their own interests to the detriment of the broader public good.

Stability

The condition when a system tends to return to its equilibrium after a disturbance.

Chicago School

An economic theory group that emphasizes free-market principles and criticizes government intervention.

Virginia School

A group of economists who focus on political economics and the role of interest groups in politics.

Theoretical politics

A field of study that develops theories to explain political phenomena.

Sunk costs

Costs that have already been incurred and cannot be recovered.

Bureaucrats

Government officials or administrators who implement policies.

Vote-maximizing regulators

The idea that regulators make decisions aimed at maximizing their electoral support.

Capture theory

The theory that regulatory agencies may be dominated by the very industries they are supposed to regulate.

X-inefficiency

Inefficiency that arises from lack of competitive pressure in industries.

Pareto efficiency

A situation where no individual can be made better off without making someone else worse off.

Elasticity of supply

A measure of how much the quantity supplied of a good responds to a change in price.

Social regulation

Regulations aimed at protecting the public's interests in areas such as health and the environment.

Frequency of rent-seeking

The regular occurrence of efforts by individuals or groups to secure economic advantage through political means.

Nash equilibrium

A situation where no player can benefit by unilaterally changing their strategy if the strategies of the others remain unchanged.

Government as supplier

The concept that the government not just regulates but also plays a role in the supply of economic advantages to interest groups.

Rational choice theory

The theory that individuals make decisions based on maximizing utility and balancing costs and benefits.

Political process

The series of activities associated with the governance of a country or area.

Comprehensive tax reform

A significant overhaul of the tax code aimed at simplifying and improving its efficiency.