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Ideological uncertainty and lobbying competition

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  • Martimort, David
  • Semenov, Aggey

Abstract

Polarized interest groups compete to influence a decision-maker through monetary contributions. The decision-maker chooses a one-dimensional policy and has private information about his ideal point. Competition between interest groups under asymmetric information yields a rich pattern of equilibrium strategies and payoffs. Policies are systematically biased towards the decision-maker's ideal point and it may sometimes lead to a "laissez-faire" equilibrium where the decision-maker is freed from any influence. Either the most extreme decision-makers or the most moderate ones may get information rent depending on their ideological bias. The market for influence may exhibit segmentation with interest groups keeping an unchallenged influence on ideologically close-by decision-makers. Interest groups refrain from contributing when there is too much uncertainty on the decision-maker's ideology and when the latter is ideologically too far away.

Suggested Citation

  • Martimort, David & Semenov, Aggey, 2008. "Ideological uncertainty and lobbying competition," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 456-481, April.
  • Handle: RePEc:eee:pubeco:v:92:y:2008:i:3-4:p:456-481
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    References listed on IDEAS

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    Cited by:

    1. Martimort, David & Semenov, Aggey & Stole, Lars, 2017. "A Complete Characterization of Equilibria in a Common Agency Screening Game," MPRA Paper 80870, University Library of Munich, Germany.
    2. Felgenhauer, Mike, 2010. "Transparency and special interests," Economics Letters, Elsevier, vol. 106(1), pages 4-7, January.
    3. Semenov, Aggey, 2010. "Common agency with risk-averse agent," Journal of Mathematical Economics, Elsevier, vol. 46(1), pages 38-49, January.
    4. Carmona, Guilherme & Fajardo, José, 2009. "Existence of equilibrium in common agency games with adverse selection," Games and Economic Behavior, Elsevier, vol. 66(2), pages 749-760, July.
    5. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    6. Mireille Chiroleu-Assouline & Thomas P. Lyon, 2016. "Merchants of Doubt: Corporate Political Influence when Expert Credibility is Uncertain," Working Papers 2016.28, FAERE - French Association of Environmental and Resource Economists.
    7. Martimort, David & Stole, Lars, 2015. "Menu Auctions and Influence Games with Private Information," MPRA Paper 62388, University Library of Munich, Germany.
    8. Eddie Dekel & Matthew O. Jackson & Asher Wolinksy, 2006. "Vote Buying II: Legislatures and Lobbying," Discussion Papers 1433, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    9. Martimort, David & Stole, Lars, 2011. "Public Contracting in Delegated Agency Games," MPRA Paper 32874, University Library of Munich, Germany.
    10. David Martimort & Aggey Semenov & Lars Stole, 2016. "A Complete Characterization of Equilibria in Common Agency Screening Games," Working Papers 1618E, University of Ottawa, Department of Economics.
    11. Aggey Semenov, 2014. "Existence and continuity of the optimal contract in adverse selection models with constraints," Working Papers E1402E, University of Ottawa, Department of Economics.
    12. Mike Felgenhauer, 2007. "Policy Bias Equivalence under Common Agency," Journal of Economics, Springer, vol. 90(3), pages 295-312, April.
    13. Lima, Rafael Costa & Moreira, Humberto, 2014. "Information transmission and inefficient lobbying," Games and Economic Behavior, Elsevier, vol. 86(C), pages 282-307.
    14. repec:the:publsh:2266 is not listed on IDEAS
    15. Martimort, David & Semenov, Aggey & Stole, Lars, 2015. "A Complete Characterization of Equilibria in Two-type Common Agency Screening Games," MPRA Paper 66620, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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