Moral hazard and free riding in collective action
Most political and economic theorists point to moral hazard in teams as the main obstacle to lobbies' collective action. In this paper, we address this important issue with a coalition-formation game. In the process of doing so, we characterize equilibrium lobby structures both in the absence and in the presence of moral hazard. Three notable results emerge from such an exercise: (i) an equilibrium lobby structure exists under both specications of the model, (ii) moral hazard in teams may raise large groups' equilibrium lobby size, and (iii) it may also raise the total contribution to lobbying of large groups with low organizational costs.
(This abstract was borrowed from another version of this item.)
Volume (Year): 32 (2009)
Issue (Month): 2 (February)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/economic+theory/journal/355|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Felli, L. & Merlo, A., 2000.
00-04, C.V. Starr Center for Applied Economics, New York University.
- Felli, Leonardo & Merlo, Antonio, 2002. "Endogenous Lobbying," CEPR Discussion Papers 3174, C.E.P.R. Discussion Papers.
- Leonardo Felli & Antonio Merlo, 2001. "Endogenous Lobbying," PIER Working Paper Archive 04-043, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Oct 2004.
- Leonardo Felli & Antonio M. Merlo, 2000. "Endogenous Lobbying," CESifo Working Paper Series 291, CESifo Group Munich.
- Leonardo Felli & Antonio Merlo, 2003. "Endogenous lobbying," LSE Research Online Documents on Economics 3590, London School of Economics and Political Science, LSE Library.
- Leonardo Felli & Antonio Merlo, 2003. "Endogenous Lobbying," STICERD - Theoretical Economics Paper Series 448, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Leonardo Felli & Antonio Merlo, . "Endogenous Lobbying," CARESS Working Papres 00-03, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Baik, Kyung Hwan & Lee, Sanghack, 2001. "Strategic Groups and Rent Dissipation," Economic Inquiry, Western Economic Association International, vol. 39(4), pages 672-84, October.
- Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
- Mar? Paz Espinosa & Inés Macho-Stadler, .
"Endogenous Formation Of Partnerships With Moral Hazard,"
UFAE and IAE Working Papers
448.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Paz Espinosa, Maria & Macho-Stadler, Ines, 2003. "Endogenous formation of competing partnerships with moral hazard," Games and Economic Behavior, Elsevier, vol. 44(1), pages 183-194, July.
- Mari Paz Espinosa & Inez Macho-Stadler, 2000. "Endogenous Formation of Partnership with Moral Hazard," Econometric Society World Congress 2000 Contributed Papers 0565, Econometric Society.
- Espinosa Alejos, María Paz & Macho Stadler, Inés, 2002. "Endogenous Formation of Competing Partnership with Moral Hazard," DFAEII Working Papers 2002-34, University of the Basque Country - Department of Foundations of Economic Analysis II.
- repec:ags:afjare:141665 is not listed on IDEAS
- Baik, Kyung Hwan & Shogren, Jason F, 1995. "Competitive-Share Group Formation in Rent-Seeking Contests," Public Choice, Springer, vol. 83(1-2), pages 113-26, April.
- Marick F. Masters & John Thomas Delaney, 1987. "Union Political Activities: A Review of the Empirical Literature," ILR Review, Cornell University, ILR School, vol. 40(3), pages 336-353, April.
- Saijo, Tatsuyoshi & Yamato, Takehiko, 1999. "A Voluntary Participation Game with a Non-excludable Public Good," Journal of Economic Theory, Elsevier, vol. 84(2), pages 227-242, February.
- Santiago Sánchez-Pagés, 2007.
"Endogenous coalition formation in contests,"
Review of Economic Design,
Springer;Society for Economic Design, vol. 11(2), pages 139-163, September.
- Friedrich Schneider & Werner W. Pommerehne, 1981. "Free Riding and Collective Action: An Experiment in Public Microeconomics," The Quarterly Journal of Economics, Oxford University Press, vol. 96(4), pages 689-704.
- Murdoch, James C. & Sandler, Todd & Vijverberg, Wim P. M., 2003. "The participation decision versus the level of participation in an environmental treaty: a spatial probit analysis," Journal of Public Economics, Elsevier, vol. 87(2), pages 337-362, February.
- Le Breton, Michel & Salanie, Francois, 2003. "Lobbying under political uncertainty," Journal of Public Economics, Elsevier, vol. 87(12), pages 2589-2610, December.
- John Duggan, . "Non-Cooperative Games Among Groups," Wallis Working Papers WP21, University of Rochester - Wallis Institute of Political Economy.
- Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, September.
- Francis Bloch & Santiago Sánchez-Pagés & Raphaël Soubeyran, 2006. "When does universal peace prevail? Secession and group formation in conflict," Economics of Governance, Springer, vol. 7(1), pages 3-29, 01.
- 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.
- Pecorino, Paul, 2001. "Can by-product lobbying firms compete?," Journal of Public Economics, Elsevier, vol. 82(3), pages 377-397, December.
When requesting a correction, please mention this item's handle: RePEc:spr:sochwe:v:32:y:2009:i:2:p:197-219. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.