Menu Auctions, Resource Allocation, and Economic Influence

Illegal Immigration: Policy Perspectives and Challenges

“…To formally study how pressure groups shape policy towards international factor mobility, Facchini and Willmann (2005) develop a simple theoretical model, which is based upon the menu auction framework pioneered by Bernheim and Whinston (1986). In their setting, policy is determined as the result of the interaction between organized groups -representing production factors -who maximize the net welfare of their members, and an elected politician who trades off aggregate welfare vis a vis political contributions.…”

Lobbying Expenditures on Migration: a Descriptive Analysis

“…Using the menu auction framework pioneered by Bernheim and Whinston (1986), the authors model the determination of policies towards international factor mobility as the result of the interaction between organized groups and an elected politician. Using a one-good multiple factors framework, the model highlights how policies depend on both whether a production factor is represented or not by a lobby and on the degree of substitutability/complementarity between factors.…”

Interest Group Behavior and Influence

“…One approach actually explaining why influence occurs is the common agency or menu auction model of Bernheim and Whinston (1986), which got widely applied through the influential work of Helpman (1994, 2001). Applications of the model concern international trade policies Helpman 1994, 1995), electoral competition Helpman 1996, Prat 2000), Interestingly, Grossman and Helpman (1996) demonstrate that the function maximized by the policymaker can be endogenously obtained in an electoral competition model where parties maximize their seat shares in a legislature and where contributions can influence 14 Bernheim and Whinston (1986) show that the set of best responses to any strategies played by opponents includes a strategy that is 'truthful', which means that it reflects the true preferences of the interest group; moreover, such equilibria are 'coalition proof', in the sense that players cannot improve their lot through costless pre-play communication which carries no commitment.…”