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Protection, Lobbying, and Market Structure

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  • Arye Hillman
  • Ngo Van Long
  • Antoine Soubeyran

Abstract

We analyze a model of lobbying by oligopolists who allocate resources between lobbying and internal cost-reducing activities. We ask the following questions: (i) if firms differ with respect to comparative advantage in lobbying, what is the equilibrium allocation of resources between lobbying and cost-reducing activities? (ii) can the possibility of lobbying reverse the profitability ranking among firms? (iii) under what condition is the conventional wisdom (that highly concentrated industries tend to obtain more protection) valid? On analyse un modèle de lobbying par des entrepreneurs qui allouent leur temps entre les activités de supervision. On donne des réponses aux questions suivantes: (i) quelles sont les allocations de ressources en équilibre? Le lobbying pourrait-il renverser l'ordre de rentabilité parmi les firmes? (iii) y a-t-il une corrélation entre le degré de concentration d'une industrie et la protection qu'elle obtient du gouvernement?

Suggested Citation

  • Arye Hillman & Ngo Van Long & Antoine Soubeyran, 2000. "Protection, Lobbying, and Market Structure," CIRANO Working Papers 2000s-12, CIRANO.
  • Handle: RePEc:cir:cirwor:2000s-12
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Naylor, Robin & Soegaard, Christian Author-workplace-Name University of Warwick, 2018. "The Effects of Entry in Oligopolistic Trade with Bargained Input Prices," The Warwick Economics Research Paper Series (TWERPS) 1148, University of Warwick, Department of Economics.
    2. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo Group Munich.
    3. Lasserre, Pierre & Soubeyran, Antoine, 2003. "A Ricardian model of the tragedy of the commons," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 29-45, January.
    4. Bombardini, Matilde & Trebbi, Francesco, 2012. "Competition and political organization: Together or alone in lobbying for trade policy?," Journal of International Economics, Elsevier, vol. 87(1), pages 18-26.
    5. Ngo Van Long & Antoine Soubeyran, 2003. "A Theory of Favoritism under International Oligopoly," CIRANO Working Papers 2003s-15, CIRANO.
    6. Tavares, Samia, 2006. "Deeper Integration and Voting on the Common European External Tariff," MPRA Paper 960, University Library of Munich, Germany.
    7. Tomaso Duso & Astrid Jung, 2007. "Market Conduct and Endogenous Lobbying: Evidence from the U.S. Mobile Telecommunications Industry," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 9-29, March.
    8. Samia Tavares, 2006. "The political economy of the European customs classification," Public Choice, Springer, vol. 129(1), pages 107-130, October.
    9. Arye Hillman & Ngo Van Long, 2017. "The social cost of contestable benefits," CIRANO Working Papers 2017s-11, CIRANO.
    10. Andrew Dick, 1995. "Explaining Managed Trade as Rational Cheating (Forthcoming in Review of International Economics)," UCLA Economics Working Papers 730, UCLA Department of Economics.
    11. Arye L. Hillman & Ngo Van Long, 2017. "Rent Seeking: The Social Cost of Contestable Benefits," CESifo Working Paper Series 6462, CESifo Group Munich.
    12. Koziashvili, Arkadi & Nitzan, Shmuel & Tobol, Yossef, 2010. "Bureaucracy Norms and Market Size," Economics Series 259, Institute for Advanced Studies.
    13. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, EconWPA.
    14. Tavares, Samia, 2006. "The Common External Tariff in a Customs Union: Voting, Logrolling, and National Government Interests," MPRA Paper 959, University Library of Munich, Germany.
    15. Kim, Young-Han & Kim, Sang-Kee, 2012. "Welfare effects of competitive lobbying efforts in international oligopoly markets," Economic Modelling, Elsevier, vol. 29(3), pages 614-620.
    16. Panagariya, Arvind & Findlay, Ronald & DEC, 1994. "A political - economy analysis of free trade areas and customs unions," Policy Research Working Paper Series 1261, The World Bank.

    More about this item

    Keywords

    Lobbying; oligopoly; protection; quota; Lobbying; oligopole; protection; quota;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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