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Astroturf: Interest Group Lobbying and Corporate Strategy

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  • Thomas P. Lyon

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

  • John W. Maxwell

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

Abstract

We study three corporate nonmarket strategies designed to influence the lobbying behavior of other special interest groups: (1) astroturf, in which the firm covertly subsidizes a group with similiar views to lobby when it normally would not; (2) the bear hug, in which the firm overtly pays a group to alter its lobbying activitives; and (3) self-regulation, in which the firm voluntarily limits the potential social harm from its activities. All three strategies reduce the informativeness of lobbying, and all reduce the payoff of the public decision-maker. We show that the decision-maker would benefit by requiring the public disclosure of funds but that the availability of alternative strategies limits the impact of such a policy.

Suggested Citation

  • Thomas P. Lyon & John W. Maxwell, 2004. "Astroturf: Interest Group Lobbying and Corporate Strategy," Working Papers 2004-18, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  • Handle: RePEc:iuk:wpaper:2004-18
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    References listed on IDEAS

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    Cited by:

    1. Sébastien Mena & Daniel Waeger, 2014. "Activism for Corporate Responsibility: Conceptualizing Private Regulation Opportunity Structures," Journal of Management Studies, Wiley Blackwell, vol. 51(7), pages 1091-1117, November.
    2. Charles Cho & Martin Martens & Hakkyun Kim & Michelle Rodrigue, 2011. "Astroturfing Global Warming: It Isn’t Always Greener on the Other Side of the Fence," Journal of Business Ethics, Springer, vol. 104(4), pages 571-587, December.
    3. Jean-Philippe BONARDI & Olivier CADOT & Lionel COTTIER, 2016. "Extremists into Truth-tellers: Information Aggregation under Asymmetric Preferences," Working Papers P149, FERDI.
    4. Lawton, Thomas & Rajwani, Tazeeb & Doh, Jonathan, 2013. "The antecedents of political capabilities: A study of ownership, cross-border activity and organization at legacy airlines in a deregulatory context," International Business Review, Elsevier, vol. 22(1), pages 228-242.
    5. Santiago Urbiztondo & Jean‐Philippe Bonardi & Bertrand V. Quélin, 2013. "International Expansion, Diversification and Regulated Firm Nonmarket Strategy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 34(6), pages 379-396, September.
    6. Allard Made, 2014. "Information Provision by Interest Groups," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(4), pages 649-664, August.
    7. Bonardi, Jean-Philippe, 2008. "The internal limits to firms' nonmarket activities," MPRA Paper 14500, University Library of Munich, Germany.
    8. Mireille Chiroleu-Assouline & Thomas P. Lyon, 2016. "Merchants of Doubt: Corporate Political Influence when Expert Credibility is Uncertain," Working Papers 2016.28, FAERE - French Association of Environmental and Resource Economists.
    9. Hayagreeva Rao & Sunasir Dutta, 2018. "Why Great Strategies Spring from Identity Movements," Strategy Science, INFORMS, vol. 3(1), pages 313-322, March.
    10. An Zeng & Stefano Battiston, 2016. "The Multiplex Network of EU Lobby Organizations," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-15, October.
    11. Nicolas Dahan & Jonathan Doh & Jonathan Raelin, 2015. "Pivoting the Role of Government in the Business and Society Interface: A Stakeholder Perspective," Journal of Business Ethics, Springer, vol. 131(3), pages 665-680, October.
    12. Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer.
    13. Mireille Chiroleu‐Assouline & Thomas P. Lyon, 2020. "Merchants of doubt: Corporate political action when NGO credibility is uncertain," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(2), pages 439-461, April.
    14. Archishman Chakraborty & Rick Harbaugh, 2010. "Persuasion by Cheap Talk," American Economic Review, American Economic Association, vol. 100(5), pages 2361-2382, December.
      • Archishman Chakraborty & Rick Harbaugh, 2006. "Persuasion by Cheap Talk," Working Papers 2006-10, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy, revised Oct 2009.
    15. Mireille Chiroleu-Assouline & Thomas P. Lyon, 2016. "Merchants of Doubt: Corporate Political Influence when Expert Credibility is Uncertain," CESifo Working Paper Series 6165, CESifo.
    16. Mary-Hunter McDonnell, 2016. "Radical Repertoires: The Incidence and Impact of Corporate-Sponsored Social Activism," Organization Science, INFORMS, vol. 27(1), pages 53-71, February.
    17. Kovic, Marko & Rauchfleisch, Adrian & Sele, Marc & Caspar, Christian, 2016. "Digital astroturfing in politics: Definition, typology, and countermeasures," SocArXiv 7ucsh, Center for Open Science.
    18. Kenneth M. Henrie & Christian Gilde, 2019. "An Examination of the Impact of Astroturfing on Nationalism: A Persuasion Knowledge Perspective," Social Sciences, MDPI, Open Access Journal, vol. 8(2), pages 1-1, January.
    19. Thomas P. Lyon & John W. Maxwell, 2011. "Greenwash: Corporate Environmental Disclosure under Threat of Audit," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(1), pages 3-41, March.

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