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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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    Cited by:

    1. Perrin Lefebvre & David Martimort, 2022. "Delegation, capture and endogenous information structures," Journal of Theoretical Politics, , vol. 34(3), pages 357-414, July.
    2. Martimort, David & Stole, Lars A., 2022. "Participation constraints in discontinuous adverse selection models," Theoretical Economics, Econometric Society, vol. 17(3), July.
    3. 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.
    4. Javier Rivas Ruiz, 2016. "Lobbying, Campaign Contributions and Political Competition," Department of Economics Working Papers 55/16, University of Bath, Department of Economics.
    5. Martimort, David, 2019. ""When Olson Meets Dahl": From Inefficient Groups Formation to Inefficient Policy-Making," CEPR Discussion Papers 13843, C.E.P.R. Discussion Papers.
    6. 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.
    7. 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.
    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. 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.
    10. 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).
    11. Lima, Rafael Costa & Moreira, Humberto, 2014. "Information transmission and inefficient lobbying," Games and Economic Behavior, Elsevier, vol. 86(C), pages 282-307.
    12. 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.
    13. 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.
    14. Felgenhauer, Mike, 2010. "Transparency and special interests," Economics Letters, Elsevier, vol. 106(1), pages 4-7, January.
    15. Semenov, Aggey, 2010. "Common agency with risk-averse agent," Journal of Mathematical Economics, Elsevier, vol. 46(1), pages 38-49, January.
    16. 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.
    17. Seungjin Han & Siyang Xiong, 2022. "Common Agency with Non-Delegation or Imperfect Commitment," Department of Economics Working Papers 2022-05, McMaster University.
    18. Perrin Lefebvre & David Martimort, 2023. "Reform for Sale : A Common Agency Model with Moral Hazard Frictions," Post-Print hal-04234620, HAL.
    19. Martimort, David & Stole, Lars, 2015. "Menu Auctions and Influence Games with Private Information," MPRA Paper 62388, University Library of Munich, Germany.
    20. 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.
    21. Martimort, David & Stole, Lars, 2011. "Public Contracting in Delegated Agency Games," MPRA Paper 32874, University Library of Munich, Germany.
    22. Konstantinos Protopappas, 2022. "Optimal lobbying pricing," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(1), pages 37-61, July.
    23. 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.
    24. Mike Felgenhauer, 2007. "Policy Bias Equivalence under Common Agency," Journal of Economics, Springer, vol. 90(3), pages 295-312, April.

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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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