Lobbying Contests with Endogenous Policy Proposals

WZB Markets and Political Economy Working Paper No. SP II 2005-11

14 Pages Posted: 18 May 2005

See all articles by Johannes Münster

Johannes Münster

Wissenschaftszentrum Berlin fuer Sozialforschung (WZB) - Market Processes and Governance

Date Written: May 2005

Abstract

Lobbyists choose what to lobby for. If they can precommit to certain policy proposals, their choice will have an influence on the behavior of opposing lobbyists. Hence lobbyists have an incentive to moderate their policy proposals in order to reduce the intensity of the lobbying contest. This logic has been explored in a number of recent papers. I reconsider the topic with a perfectly discriminating contest. With endogenous policy proposals, there is a sub-game perfect equilibrium where the proposals of the lobbyists coincide and maximize joint welfare; moreover, this equilibrium is the only one that survives repeated elimination of dominated strategies. Hence there is no rent dissipation at all. A politician trying to maximize lobbying expenditures would prefer an imperfectly discriminating contest.

Keywords: Interest groups, endogenous lobbying targets, voluntary restraint, polarization

JEL Classification: D72

Suggested Citation

Münster, Johannes, Lobbying Contests with Endogenous Policy Proposals (May 2005). WZB Markets and Political Economy Working Paper No. SP II 2005-11, Available at SSRN: https://ssrn.com/abstract=722478 or http://dx.doi.org/10.2139/ssrn.722478

Johannes Münster (Contact Author)

Wissenschaftszentrum Berlin fuer Sozialforschung (WZB) - Market Processes and Governance ( email )

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