Coalition formation versus free riding in rent-seeking contests

Lukas Block ()
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Lukas Block: Paderborn University

No 93, Working Papers Dissertations from Paderborn University, Faculty of Business Administration and Economics

Abstract: We study lobby group formation in a two-stage model where the players first form lobby groups that then engage in a rent-seeking contest to influence the legislator. However, the outcome of the contest affects all players according to the ideological distance between the implemented policy and the players' preferences. The players can either lobby by themselves, form a coalition of lobbyists or free ride. We find that free coalition formation is reasonable if either players with moderate preferences face lobby groups with extreme preferences, or if there are two opposing coalitions with an equal number of members. Otherwise, there are always free riders among the players. (abstract of the paper)

Keywords: Group formation; Rent-seeking; Free riding (search for similar items in EconPapers)
JEL-codes: C71 D72 D74 (search for similar items in EconPapers)
Pages: 19
Date: 2022-04
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-mic, nep-net and nep-pol
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