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Special interest politics: Contribution schedules vs. Nash bargaining

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  • Achim Voss
  • Mark Schopf

Abstract

The article compares two models of lobby influence on policy choice: The Grossman and Helpman (1994) contribution†schedules model and a negotiation between the lobbies and the government summarized by a Nash†bargaining function. The literature uses the models interchangeably because they imply the same equilibrium policy. We show that particular assumptions about bargaining power and disagreement utility in the Nash†bargaining solution are required for the models to lead to the same equilibrium payments and utilities. This implies that the models usually imply different sets of lobbies if lobby formation is an endogenous decision, such that the equilibrium policies also differ.

Suggested Citation

  • Achim Voss & Mark Schopf, 2018. "Special interest politics: Contribution schedules vs. Nash bargaining," Economics and Politics, Wiley Blackwell, vol. 30(2), pages 256-273, July.
    • Handle: RePEc:bla:ecopol:v:30:y:2018:i:2:p:256-273
    DOI: 10.1111/ecpo.12107
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    References listed on IDEAS

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    Cited by:

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    2. Boucekkine, Raouf & Piacquadio, Paolo G. & Prieur, Fabien, 2019. "A Lipsetian theory of voluntary power handover," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 269-291.

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