IDEAS home Printed from https://ideas.repec.org/p/iuk/wpaper/2004-18.html
   My bibliography  Save this paper

Astroturf: Interest Group Lobbying and Corporate Strategy

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://kelley.iu.edu/riharbau/RePEc/iuk/wpaper/bepp2004-18-lyon-maxwell.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lohmann, Susanne, 1993. "A Signaling Model of Informative and Manipulative Political Action," American Political Science Review, Cambridge University Press, vol. 87(2), pages 319-333, June.
    2. Lupia, Arthur & McCubbins, Mathew D, 1994. "Learning from Oversight: Fire Alarms and Police Patrols Reconstructed," Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(1), pages 96-125, April.
    3. Drew Fudenberg & Jean Tirole, 1986. "A "Signal-Jamming" Theory of Predation," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 366-376, Autumn.
    4. Maxwell, John W & Lyon, Thomas P & Hackett, Steven C, 2000. "Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 583-617, October.
    5. Lyon, Thomas P. & Maxwell, John W., 2003. "Self-regulation, taxation and public voluntary environmental agreements," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1453-1486, August.
    6. Robert Aumann & Adam Brandenburger, 2014. "Epistemic Conditions for Nash Equilibrium," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 5, pages 113-136, World Scientific Publishing Co. Pte. Ltd..
    7. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    8. David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 7-45, March.
    9. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    10. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    11. Livio D. DeSimone & Frank Popoff, 2000. "Eco-Efficiency: The Business Link to Sustainable Development," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262541092, September.
    12. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. Hayagreeva Rao & Sunasir Dutta, 2018. "Why Great Strategies Spring from Identity Movements," Strategy Science, INFORMS, vol. 3(1), pages 313-322, March.
    4. Bonardi, Jean-Philippe & Cadot, Olivier & Cottier, Lionel, 2016. "Extremists into Truth-tellers: Information Aggregation under Asymmetric Preferences," CEPR Discussion Papers 11118, C.E.P.R. Discussion Papers.
    5. 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.
    6. 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 1-11, January.
    7. 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.
    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. 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.
    10. 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.
    11. 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.
    12. 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.
    13. 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.
    14. 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.
    15. 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.
    16. 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.
    17. Bonardi, Jean-Philippe, 2008. "The internal limits to firms' nonmarket activities," MPRA Paper 14500, University Library of Munich, Germany.
    18. Kovic, Marko & Rauchfleisch, Adrian & Sele, Marc & Caspar, Christian, 2016. "Digital astroturfing in politics: Definition, typology, and countermeasures," SocArXiv 7ucsh, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Swank, Otto H., 2000. "Policy advice, secrecy, and reputational concerns," European Journal of Political Economy, Elsevier, vol. 16(2), pages 257-271, June.
    2. Swank Otto H., 2000. "Seeking information: the role of information providers in the policy decision process," Public Economics 0004004, University Library of Munich, Germany.
    3. R. Brau & C. Carraro, 2004. "The economic analysis of voluntary approaches to environmental protection. A survey," Working Paper CRENoS 200420, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    4. Robert Dur & Otto H. Swank, 2005. "Producing and Manipulating Information," Economic Journal, Royal Economic Society, vol. 115(500), pages 185-199, January.
    5. 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.
    6. Florence TOUYA, 2019. "The Assignment of a CSR Level of Action: Rule vs Discretion," Working Papers 2018-2019_3, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Jun 2019.
    7. Florence Lachet-Touya, 2019. "The Assignment of a CSR Level of Action: Rule vs Discretion," Working Papers hal-02141052, HAL.
    8. Péter Eso & Balázs Szentes, 2004. "The Price of Advice," Discussion Papers 1416, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    9. Carrión-Flores, Carmen E. & Innes, Robert, 2010. "Environmental innovation and environmental performance," Journal of Environmental Economics and Management, Elsevier, vol. 59(1), pages 27-42, January.
    10. Aaron K. Chatterji & David I. Levine & Michael W. Toffel, 2009. "How Well Do Social Ratings Actually Measure Corporate Social Responsibility?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 125-169, March.
    11. Aseem Kaul & Jiao Luo, 2018. "An economic case for CSR: The comparative efficiency of for‐profit firms in meeting consumer demand for social goods," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1650-1677, June.
    12. Bennedsen, Morten & Feldmann, Sven E., 2006. "Informational lobbying and political contributions," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 631-656, May.
    13. Olivier Gossner & Nicolas Melissas, 2006. "Informational Cascades Elicit Private Information ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 297-325, February.
    14. 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.
    15. Shmuel Leshem, 2010. "The benefits of a right to silence for the innocent," RAND Journal of Economics, RAND Corporation, vol. 41(2), pages 398-416, June.
    16. Gayer Gabrielle & Segev Ella, 2012. "Revealing Private Information in Bargaining," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-34, December.
    17. Shon R. Hiatt & Jake B. Grandy & Brandon H. Lee, 2015. "Organizational Responses to Public and Private Politics: An Analysis of Climate Change Activists and U.S. Oil and Gas Firms," Organization Science, INFORMS, vol. 26(6), pages 1769-1786, December.
    18. Zara Sharif & Otto H. Swank, 2012. "Do More Powerful Interest Groups have a Disproportionate Influence on Policy?," Tinbergen Institute Discussion Papers 12-134/VII, Tinbergen Institute.
    19. Pierre Fleckinger & Matthieu Glachant, 2009. "La responsabilité sociale de l’entreprise et les accords volontaires sont-ils complémentaires ?," Économie et Prévision, Programme National Persée, vol. 190(4), pages 95-105.
    20. Rantakari, Heikki, 2014. "A simple model of project selection with strategic communication and uncertain motives," Journal of Economic Behavior & Organization, Elsevier, vol. 102(C), pages 14-42.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iuk:wpaper:2004-18. 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: (Rick Harbaugh). General contact details of provider: http://edirc.repec.org/data/dpiubus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.