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An optimal auction perspective on lobbying

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  • Richard T. Boylan

    () (Washington University, Olin School of Business, One Brookings Drive, St. Louis, MO 63130, USA)

Abstract

The lobbying process has been described as an auction (see, for instance, Bernheim and Whinston [4]). While the auction rules picked are supposed to be descriptive, they vary from author to author. Examples show that these different auction rules make different predictions of what policy is the outcome of the lobbying process. Further, which proposed auction rule is the most preferred by the government official depends on the preferences of lobbies. If off-the-equilibrium negative contributions (i.e., contributions from the government official to lobbies) are possible, there is a best possible auction for the government official. Such an auction leads to the same policy as in [4], although contributions are higher. If negative contributions are not possible, the government official is made worse off. It follows that since the auction rules used in the literature to describe lobbying do not allow negative contributions, none of them are optimal from the government official's perspective.

Suggested Citation

  • Richard T. Boylan, 2000. "An optimal auction perspective on lobbying," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(1), pages 55-68.
  • Handle: RePEc:spr:sochwe:v:17:y:2000:i:1:p:55-68
    Note: Received: 26 June 1998/Accepted: 19 October 1998
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    References listed on IDEAS

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    1. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
    2. Baye, Michael R & Kovenock, Dan & de Vries, Casper G, 1993. "Rigging the Lobbying Process: An Application of the All-Pay Auction," American Economic Review, American Economic Association, vol. 83(1), pages 289-294, March.
    3. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
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    Cited by:

    1. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659 Elsevier.
    2. Mikael Priks, 2011. "Judiciaries in corrupt societies," Economics of Governance, Springer, vol. 12(1), pages 75-88, March.
    3. Bertoletti, Paolo, 2006. "On the reserve price in all-pay auctions with complete information and lobbying games," MPRA Paper 1083, University Library of Munich, Germany.
    4. Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December.
    5. Mikael Priks, 2012. "Competition among officials and the abuse of power," Public Choice, Springer, vol. 150(3), pages 425-438, March.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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