Ideological uncertainty and lobbying competition

Abstract

Polarized interest groups compete to in ‡uence a decision-maker 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 payo¤s. 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 in ‡uence may exhibit segmentation with interest groups keeping an unchallenged in ‡uence 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.

Vote Buying: Legislatures and Lobbying

“…There are also related papers on lobbying that have roots in the common agency literature, such as Bernheim and Whinston (1986), Grossman and Helpman (1994), Dixit (1996), Le Breton and Salanie (2003), and Martimort and Semenov (2008), among others. 15 As such models generally look at a single voter (the politician or agent), the complete information solutions result in efficient outcomes (e.g., see Bernheim and Whinston (1986) and Le Breton and Salanie (2003)).…”

What's the damage? Environmental regulation with policy‐motivated bureaucrats

“…In the context of the political‐agency literature, the mixed motivation of policy outcomes and payments has been modeled, for instance, by Le Breton and Salanie () and Martimort and Semenov (, b, ). In these papers, the “payment” component comes from contributions offered by lobby groups in exchange for a favorable policy.…”

Existence of equilibrium in common agency games with adverse selection

“…In this subsection, we derive from Theorem 1 a general existence result for the retail market and lobby models of Martimort and Stole (2003) and Martimort and Semenov (2006), respectively.…”

“…It is worth noting that this model is a generalized version of a model suggested by Martimort and Semenov (2006). This is the case since we allow for many policy variables, more than two principals, risk aversion and more general payoff functions.…”

“…This is explicitly done for the retail market model of Martimort and Stole (2003) and the lobby problem of Martimort and Semenov (2006). In summary, our contributions are: (1) to show that the approach of Simon and Zame (1990) is quite appropriate to address the existence of equilibrium in common agency games, (2) to generalize the main result of Simon and Zame (1990), and (3) to obtain a general existence result for common agency games.…”