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The Polarization Effect of Monopsonistic Lobbying

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  • Peter Shum

Abstract

Classical spatial models predict platform convergence, yet empirical polarization persists. This paper proposes a non-electoral mechanism: lobbying as a monopsonistic market for legislative support. Here, extreme benefactors must pay more to attract distant politicians, creating a rent gradient that rewards platform differentiation. We find that the unique equilibrium places politicians at $(\frac{1}{4},\frac{3}{4})$ for any monotone policy-production cost. Thus, polarization can arise solely from lobbying-market structure, independent of electoral incentives.

Suggested Citation

  • Peter Shum, 2025. "The Polarization Effect of Monopsonistic Lobbying," Papers 2512.01796, arXiv.org.
    • Handle: RePEc:arx:papers:2512.01796
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    File URL: http://arxiv.org/pdf/2512.01796
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