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Ideological Uncertainty and Lobbying Competition

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  • Martimort, David
  • Semenov, Aggey

Abstract

Polarized interest groups (principals) compete to influence a decision-maker (agent) through monetary contributions. This decision-maker chooses a one-dimensional policy and has private information about his ideal point. Competition between interest groups under asymmetric information yields a rich pattern of equilibrium strategies and payoffs. Policies are systematically biased towards the decision-maker's ideal point and it may sometimes lead to a "laissez-faire" equilibrium. Either the most extreme decision-makers or the most moderate ones may get information rent depending on the importance of their ideological bias. The market for influence may exhibit segmentation with interest groups keeping an unchallenged influence on ideologically close-by decision-makers. Indeed, interest groups stop contributing when there is too much uncertainty on the decision-maker's ideology and when the latter is ideologically too far away.

Suggested Citation

  • Martimort, David & Semenov, Aggey, 2008. "Ideological Uncertainty and Lobbying Competition," MPRA Paper 6992, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:6992
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. David Martimort & Aggey Semenov & Lars Stole, 2016. "A Complete Characterization of Equilibria in Common Agency Screening Games," Working Papers 1618E, University of Ottawa, Department of Economics.
    2. John Duggan & Jacque Gao, 2020. "Lobbying as a multidimensional tug of war," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 54(1), pages 141-166, January.
    3. Semenov, Aggey, 2010. "Common agency with risk-averse agent," Journal of Mathematical Economics, Elsevier, vol. 46(1), pages 38-49, January.
    4. Dimitrios Xefteris & Galina Zudenkova, 2018. "Electoral competition under costly policy implementation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(4), pages 721-739, April.
    5. 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.
    6. Dekel, Eddie & Jackson, Matthew O. & Wolinsky, Asher, 2009. "Vote Buying: Legislatures and Lobbying," Quarterly Journal of Political Science, now publishers, vol. 4(2), pages 103-128, July.
    7. Aggey Semenov, 2014. "Existence and continuity of the optimal contract in adverse selection models with constraints," Working Papers E1402E, University of Ottawa, Department of Economics.
    8. Martimort, David & Stole, Lars, 2015. "Menu Auctions and Influence Games with Private Information," MPRA Paper 62388, University Library of Munich, Germany.
    9. Martimort, David & Stole, Lars, 2011. "Public Contracting in Delegated Agency Games," MPRA Paper 32874, University Library of Munich, Germany.
    10. Felgenhauer, Mike, 2010. "Transparency and special interests," Economics Letters, Elsevier, vol. 106(1), pages 4-7, January.
    11. Mike Felgenhauer, 2007. "Policy Bias Equivalence under Common Agency," Journal of Economics, Springer, vol. 90(3), pages 295-312, April.
    12. Lima, Rafael Costa & Moreira, Humberto, 2014. "Information transmission and inefficient lobbying," Games and Economic Behavior, Elsevier, vol. 86(C), pages 282-307.
    13. Martimort, David & Semenov, Aggey & Stole, Lars A., 2018. "A complete characterization of equilibria in an intrinsic common agency screening game," Theoretical Economics, Econometric Society, vol. 13(3), September.
    14. Carmona, Guilherme & Fajardo, José, 2009. "Existence of equilibrium in common agency games with adverse selection," Games and Economic Behavior, Elsevier, vol. 66(2), pages 749-760, July.
    15. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    16. Martimort, David & Semenov, Aggey & Stole, Lars, 2015. "A Complete Characterization of Equilibria in Two-type Common Agency Screening Games," MPRA Paper 66620, University Library of Munich, Germany.
    17. Alves, Amanda M. & Brousseau, Eric & Mimouni, Nada & Yeung, Timothy Yu-Cheong, 2021. "Competing for policy: Lobbying in the EU wholesale roaming regulation," Telecommunications Policy, Elsevier, vol. 45(3).

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    More about this item

    Keywords

    Lobbying Competition; Common Agency; Asymmetric Information; Contributions;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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