quasi-rent

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Quasi-Rent

Income one earns on a sunk cost. A quasi-rent occurs when one makes an investment and pays for it, and then earns income from it without needing to make further investment. In order to be considered quasi-rent, the income must exceed the opportunity cost of the investment.

quasi-rent

see ECONOMIC RENT.
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References in periodicals archive ?
In the first specification, as benchmark estimates, we perform OLS estimates to derive the impact of quasi rents per worker on wages including only observed individual and firm characteristics.
South of Italy, the increase in wages due to rents might be compensated by the fact that average quasi rents in the South are lower than in the rest of Italy.
Starting with the representative producer's profit function we consider changes in quasi rents ([DELTA]R) induced from the multiple price change:
The economic theory of auditor independence (Watts and Zimmerman 1981; DeAngelo 1981b) suggests that auditors' incentives to compromise their independence are related to client importance, the ratio of quasi rents specific to the client divided by all other quasi rents.
the ratio of quasi rents specific to that client divided by the sum of all other quasi rents.
3) In the words of Klein, Crawford, and Alchian themselves, "[a]fter a specific investment is made and such quasi rents are created, the possibility of opportunistic behavior is very real.
The crucial assumption underlying the analysis of this Article is that, as assets become more specific and more appropriable quasi rents are created (and therefore the possible gains from opportunistic behavior increases [sic]), the costs of contracting will generally increase more than the costs of vertical integration.
Analogous to the solution of the fishers' profit maximization problem under a one-pie split, surviving processors are those who earn unit quasi rents greater than the unit processing quota price, that is, [Mathematical Expression Omitted] .
3) This result follows because the monopolistic supplier of a specialized asset is in a position to capture quasi rents from joint production.
The discussion then turns to the use of insurance to increase the firm's quasi rents.
This discussion begins introducing concepts that lie at the foundation of the transactions cost theory of the firm; concepts such as asset specificity, opportunistic behavior, quasi rents, residual claimants, and asymmetric information.
5) Further inquiry, however, led him "to doubt not the reality of this risk, but its importance"(6): "Even though the costs of contracting [may] increase more than the costs of vertical integration as assets become more specific and quasi rents increase, vertical integration will not displace the long-term contract unless the costs of contracting become greater than the costs of vertical integration .

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