Quasi-rent

Quasi-rent is a term in economics that describes certain types of returns to firms.

Quasi-rent differs from pure economic rent in that it is a temporary phenomenon. It can arise from the barriers to entry that potential competitors face in the short run, such as the granting of patents or other legal protections for intellectual property by governments.

In Industrial Organizations field, Williamson points "The joining of opportunism with transaction-specific investments (or what Klein, Crawford, and Alchian refer to as "appropriable quasi rents") is a leading factor in explaining decisions to vertically integrate."[1]

Alfred Marshall (1842-1924) was the first to observe quasi rents.

Note on quasi-rent - this concept was put forward by Alfred Marshall. Quasi-rent refers to that additional income which is similar to rent. According to Ricardo, rent arises on account of fixed supply of land. But there are other factors which found in fixed supply. The additional income earned by these factors in the short-period is similar to rent.

References

  1. ↑ Williamson, Oliver (Oct 1979). "Transaction-Cost Economics: The governance of contractual relations" (PDF). Journal of Law and Economics 22 (2): 233–261. doi:10.1086/466942.
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