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Coalition formation versus free riding in rent-seeking contests

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  • Lukas Block

    (Paderborn University)

Abstract

We study lobby group formation in a two-stage model where the players first form lobby groups that then engage in a rent-seeking contest to influence the legislator. However, the outcome of the contest affects all players according to the ideological distance between the implemented policy and the players' preferences. The players can either lobby by themselves, form a coalition of lobbyists or free ride. We find that free coalition formation is reasonable if either players with moderate preferences face lobby groups with extreme preferences, or if there are two opposing coalitions with an equal number of members. Otherwise, there are always free riders among the players. (abstract of the paper)

Suggested Citation

  • Lukas Block, 2022. "Coalition formation versus free riding in rent-seeking contests," Working Papers Dissertations 93, Paderborn University, Faculty of Business Administration and Economics.
    • Handle: RePEc:pdn:dispap:93
    as

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    File URL: http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/dispap/DP93.pdf
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    References listed on IDEAS

    as
    1. Konishi, Hideo & Ray, Debraj, 2003. "Coalition formation as a dynamic process," Journal of Economic Theory, Elsevier, vol. 110(1), pages 1-41, May.
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    6. Pecorino, Paul, 1998. "Is There a Free-Rider Problem in Lobbying? Endogenous Tariffs, Trigger Strategies, and the Number of Firms," American Economic Review, American Economic Association, vol. 88(3), pages 652-660, June.
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    More about this item

    Keywords

    Group formation; Rent-seeking; Free riding;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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