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An optimal auction perspective on lobbying

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  • Richard T. Boylan

    ()
    (Washington University, Olin School of Business, One Brookings Drive, St. Louis, MO 63130, USA)

Abstract

The lobbying process has been described as an auction (see, for instance, Bernheim and Whinston [4]). While the auction rules picked are supposed to be descriptive, they vary from author to author. Examples show that these different auction rules make different predictions of what policy is the outcome of the lobbying process. Further, which proposed auction rule is the most preferred by the government official depends on the preferences of lobbies. If off-the-equilibrium negative contributions (i.e., contributions from the government official to lobbies) are possible, there is a best possible auction for the government official. Such an auction leads to the same policy as in [4], although contributions are higher. If negative contributions are not possible, the government official is made worse off. It follows that since the auction rules used in the literature to describe lobbying do not allow negative contributions, none of them are optimal from the government official's perspective.

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Bibliographic Info

Article provided by Springer in its journal Social Choice and Welfare.

Volume (Year): 17 (2000)
Issue (Month): 1 ()
Pages: 55-68

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Handle: RePEc:spr:sochwe:v:17:y:2000:i:1:p:55-68

Note: Received: 26 June 1998/Accepted: 19 October 1998
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  1. Baye, Michael R & Kovenock, Dan & de Vries, Casper G, 1993. "Rigging the Lobbying Process: An Application of the All-Pay Auction," American Economic Review, American Economic Association, vol. 83(1), pages 289-94, March.
  2. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
  3. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
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Cited by:
  1. Mikael Priks, 2012. "Competition among officials and the abuse of power," Public Choice, Springer, vol. 150(3), pages 425-438, March.
  2. Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December.
  3. Mikael Priks, 2007. "Judiciaries in Corrupt Societies," CESifo Working Paper Series 2008, CESifo Group Munich.
  4. Bertoletti, Paolo, 2006. "On the reserve price in all-pay auctions with complete information and lobbying games," MPRA Paper 1083, University Library of Munich, Germany.

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