Lobbying of Firms by Voters

Abstract

A firm may induce voters or elected politicians to support a policy it favors by suggesting that it is more likely to invest in a district whose voters or representatives support the policy. In equilibrium, no one vote may be decisive, and the policy may gain strong support though the majority of districts suffer from adoption of the program. When votes reveal information about the district, the firm's implicit promise or threat can be credible.

Keywords: Lobbying, voting, special interests, influence

JEL Classification: C72, D72, D78