Communication by Interest Groups and the Organization of Lobbying
AbstractThis paper uses a mechanism design approach to characterize the optimal organization of lobbying groups in a political context where those groups have private information on their ideal points in a one-dimensional policy space. First, we derive the optimal mechanism for one single group and show that it depends on the confict of interests between his own preferences and those of the policy-maker but also on how informative the distribution of the interest group's ideal point is. We then extend the analysis to the case of multiple nterest groups. Although dealing with a coalition of those groups allows the policy-maker to benefit from a more precise information (an informativeness effect), the optimal organization may nevertheless call for a decentralized mechanism where groups compete because this is the only way to transmit information on the relative strength of their preferences (a screening effect). A coalition of interest groups dominates for small values of the confict of interests whereas competing interest groups emerge for greater values.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 8519.
Date of creation: 01 Jul 2004
Date of revision:
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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