An optimal auction perspective on lobbying
The lobbying process has been described as an auction (see, for instance, Bernheim and Whinston). The auction rules picked are supposed to be descriptive, however they vary from author to author. An optimal auction for a government official leads to the same policy as in Bernheim and Whinston, although contributions are different. A necessary condition for an auction to be optimal is that it allows contributions from the government official to the lobby. The proof of these results depends on an extension of the work by Bernheim and Whinston on implementation in environments with complete information. In particular all choice functions are Coalition-Proof Nash equilibrium implementable when individuals preferences can be represented by quasi-linear utility functions bounded with respect to all variables -- except for money.
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- Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
- Baye, M.R. & Kovenock, D. & De Vries, C.G., 1991.
"Rigging The Lobbying Process: An Application Of The All- Pay Auction,"
Purdue University Economics Working Papers
1002, Purdue University, Department of Economics.
- Baye, Michael R & Kovenock, Dan & de Vries, Casper G, 1993. "Rigging the Lobbying Process: An Application of the All-Pay Auction," American Economic Review, American Economic Association, vol. 83(1), pages 289-94, March.
- Baye, M.R. & Kovenock, D. & De Vries, C.G., 1992. "Rigging the Lobbying Process: An Application of the All- Pay Auction," Papers 9-92-2, Pennsylvania State - Department of Economics.
- B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
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