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Extremes and Moderates: A Characterization and an Application to Lobbying

Author

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  • Kunal Sengupta
  • Murali Agastya

Abstract

Abstract: In a society where individuals differ in their valuation of different social policies, when might one consider a given individual as having references that are extreme relative to the others? And how important are such preferences in determining eventual policy? In this paper, we describe an individual as being extreme if her views differ from the mainstream to the extent that the rest of the society is able to unanimously agree on a compromise policy that they strictly prefer to what might have been the outcome if such an individual has her own way. Relying on the intermediate property of preferences due to Grandmont [1978] we provide a simple geometric characterization of extreme preferences. Furthermore, we also present an illustrative positive model of lobbying activity where we apply our characterization result to show that every equilibrium social policy is determined only by the activities of those holding extreme preferences even when they are a minority

Suggested Citation

  • Kunal Sengupta & Murali Agastya, 2004. "Extremes and Moderates: A Characterization and an Application to Lobbying," Econometric Society 2004 North American Summer Meetings 404, Econometric Society.
  • Handle: RePEc:ecm:nasm04:404
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    References listed on IDEAS

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    3. Demange, Gabrielle, 1994. "Intermediate preferences and stable coalition structures," Journal of Mathematical Economics, Elsevier, vol. 23(1), pages 45-58, January.
    4. Abhijit Banerjee & Rohini Somanathan, 2001. "A Simple Model of Voice," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 189-227.
    5. Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Social Choice: A Mean Voter Theorem," Econometrica, Econometric Society, vol. 59(1), pages 1-23, January.
    6. Sprumont, Y., 1991. "Intermediate Preferences And Rawlsian Arbitration Rules," Cahiers de recherche 9113, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    7. Grandmont, Jean-Michel, 1978. "Intermediate Preferences and the Majority Rule," Econometrica, Econometric Society, vol. 46(2), pages 317-330, March.
    8. Jeffrey S. Rosenthal & Martin J. Osborne & Matthew A. Turner, 2000. "Meetings with Costly Participation," American Economic Review, American Economic Association, vol. 90(4), pages 927-943, September.
    9. Esteban, J. & Ray, D., 1999. "Collective Action and Group Size Paradox," Papers 23, El Instituto de Estudios Economicos de Galicia Pedro Barrie de la Maza.
    10. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
    11. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-921, September.
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    More about this item

    Keywords

    Extremes; moderates; intermediate preferences; collective decisions and lobbying;

    JEL classification:

    • D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D69 - Microeconomics - - Welfare Economics - - - Other

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