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Market Conduct and Endogenous Lobbying: Evidence from the U. S. Mobile Telecommunications Industry

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  • Tomaso Duso

    ()

  • Astrid Jung

    ()

Abstract

This paper empirically explores the relationship between firms´market behavior and their lobbying activities in a regulated market. In particular, we investigate whether the amount of contributions offered by cellular service providers to fund the campaigns of political parties affected market conduct in the early US mobile telecommunivations industry. We structurally estimate market interactions while taking the potential endogeneity of lobbying decisions into account. Our results show that competition was more intense in those states where campaign contributions by the cellular industry have been higher. Furthermore, we reject the hypothesis that lobbying activities can be regarded as exogenous in the study of market conduct.

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File URL: http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie0315.pdf
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Paper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 0315.

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Date of creation: Oct 2003
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Handle: RePEc:vie:viennp:0315

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Web page: http://www.univie.ac.at/vwl

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  13. Tripathi Micky & Ansolabehere Stephen & Jr James M. Snyder, 2002. "Are PAC Contributions and Lobbying Linked? New Evidence from the 1995 Lobby Disclosure Act," Business and Politics, De Gruyter, vol. 4(2), pages 1-26, August.
  14. Pecorino, Paul, 2001. " Market Structure, Tariff Lobbying and the Free-Rider Problem," Public Choice, Springer, vol. 106(3-4), pages 203-20, March.
  15. John W. Mayo & Yasuji Otsuka, 1991. "Demand, Pricing, and Regulation: Evidence from the Cable TV Industry," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 396-410, Autumn.
  16. 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.
  17. Ludema, Rodney D., 2001. "Market collusion and the politics of protection," European Journal of Political Economy, Elsevier, vol. 17(4), pages 817-833, November.
  18. 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 652-60, June.
  19. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
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