Recall the Application on Native American casinos in Michigan. Why arent similar deals proposed for new clothing
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Recall the Application on Native American casinos in Michigan. Why aren’t similar deals proposed for new clothing stores, music stores, or auto repair shops?
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Application 2 RENT SEEKING FOR TRIBAL CASINOS APPLYING THE CONCEPTS #2: What is the value of a monopoly? OHKAY CASINO In 1993, seven Native American Tribes in Michigan cut a deal with the state. In exchange for being granted a monopoly in Vegas-style casino gambling, the tribes agreed to pay the state and local governments a share of its profits. By 1998, the profit sharing totaled more than $183 million. In 1998, the state opened gambling to other tribes, and the profit-sharing arrange- ment stopped. This is an example of rent seeking: The tribes agreed to pay millions of dollars to secure a monopoly, and when the monopoly ended, so did the payments. Related to Exercises 2.5, 2.6, and 2.7. SOURCES: Jennifer Dixon, Tribal Gaming: State is Losing a Casino Jackpot," Detroit Free Press, February 14, 2007; Melissa Anders, "Michigan Casino Update: State, Tribes in Negotiations on Revenue Sharing, Off-Reservation Gaming," mLive Michigan, November 27, 2013.
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Microeconomics Principles Applications And Tools
ISBN: 9780134078878
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