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How to Win the Political Contest: A Monopolist vs. Environmentalists

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  • Graichen, Patrick R
  • Requate, Till
  • Dijkstra, Bouwe R

Abstract

This paper sheds light on the political economy of local energy politics both from a theoretical and an empirical perspective. First, a case study of a small town in Southern Germany (Schonau) is presented, where environmentalists have won the political contest against the regional energy monopolist and have founded an energy supply firm themselves. The different stages of the political process are explained and analysed. Second, a political economy model is developed, where environmentalists and a monopolistic utility firm confront each other both on the political and on the energy market. In the lobbying equilibrium the probability of the environmentalists' winning the game depends on the monopoly rent and the perceived social costs of energy production. It is shown that it is optimal for the monopolist to reduce his output below the monopolistic output. Finally, the winning strategy in the Schonau case is discussed in the light of the theoretical results of the paper. Copyright 2001 by Kluwer Academic Publishers

Suggested Citation

  • Graichen, Patrick R & Requate, Till & Dijkstra, Bouwe R, 2001. "How to Win the Political Contest: A Monopolist vs. Environmentalists," Public Choice, Springer, vol. 108(3-4), pages 273-293, September.
  • Handle: RePEc:kap:pubcho:v:108:y:2001:i:3-4:p:273-93
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    Cited by:

    1. Pierre FAUVET, 2016. "Market approval process, responsibility failure, and pressure groups," Cahiers du GREThA 2016-16, Groupe de Recherche en Economie Théorique et Appliquée.
    2. Elias Asproudis, 2011. "Revisiting environmental groups and members’ behaviour: budget, size and (im)pure altruism," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(2), pages 139-156, June.
    3. Tim Friehe, 2013. "The Role of Investment in Environmental Lobbying Contests," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 337-352, November.
    4. Pierre Fauvet & Sébastien Rouillon, 2016. "Would you trust lobbies?," Public Choice, Springer, vol. 167(3), pages 201-219, June.
    5. Dijkstra, Bouwe R., 2007. "An investment contest to influence environmental policy," Resource and Energy Economics, Elsevier, vol. 29(4), pages 300-324, November.
    6. Janmaat, Johannus A., 2007. "Stakeholder Engagement in Land Development Decisions: A Waste of Effort?," MPRA Paper 6147, University Library of Munich, Germany.
    7. Leo Wangler, 2012. "The political economy of the green technology sector: A study about institutions, diffusion and efficiency," European Journal of Law and Economics, Springer, vol. 33(1), pages 51-81, February.

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