Increasingly, lobbying groups are subject to transparency requirements, obliging them to provide detailed information about their business. We study the effect this transparency policy has on the nature of lobbying competition. Under mild conditions, mandated transparency leads to an increase in wastefulness of lobbying competition and a decline in expected allocative efficiency. Hence we identify a negative side-effect of transparency policy, which also has implications for various other fields such as political campaigning or firm competition.
We explore how public opinion polls affect candidates' campaign spending in political competition. Generally, polls lead to (more) asymmetric behavior. Under a majority rule there always exists an equilibrium in which the initially more popular candidate invests more in the campaign and thereby increases her lead in expectation: polls create momentum. When campaigning is very effective and the race is very close, a second type of equilibrium may exist: the trailing candidate outspends and overtakes his opponent. Regardless of the type of equilibrium, polls have a tendency to decrease expected total campaigning expenditures by amplifying ex-ante asymmetries between candidates and thus defusing competition. When candidates care also for their vote share in addition to having the majority, candidates' incentives crucially depend on the distribution of voters' candidate preferences.JEL Codes: D02, D72, D74, D83
In this paper I develop a formal theory of campaign communications. Voters have beliefs about the quality of candidates in the different policy issues and about the issues' relative importance. Candidates spend time or money (TV ads, public speeches, etc.) in an effort to influence voters' decisions at the ballot. Influence has two simultaneous effects: (i) it increases the quality of the policy in the issue as perceived by the voters through policy/competence advertising and (ii) it makes the issue more salient through issue priming, thereby increasing the issue's perceived importance. A strategy is an allocation of influence activities to the different issues or topics. I show conditions under which candidates' strategies converge or diverge, which issues -if any -will dominate the campaign, and under what conditions candidates are forced to focus on issues in which they are perceived to be weak. The results are often conflicting with previous theories of campaigning but are able to explain a set of anomalies.
h i g h l i g h t s• We study head starts in dynamic two-player tournaments a la Lazear and Rosen (1981).• A principal values aggregate effort and the highest effort exerted by the players.• It is always optimal to bias the tournament by awarding a head start.• A small head start increases the highest effort without decreasing aggregate effort.
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