Ideological Uncertainty and Lobbying Competition

David Martimort and Aggey Semenov

MPRA Paper from University Library of Munich, Germany

Abstract: Polarized interest groups (principals) compete to influence a decision-maker (agent) 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 payoffs. 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 influence may exhibit segmentation with interest groups keeping an unchallenged influence 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.

Keywords: Lobbying Competition; Common Agency; Asymmetric Information; Contributions (search for similar items in EconPapers)
JEL-codes: D7 D8 (search for similar items in EconPapers)
Date: 2008-02-02
New Economics Papers: this item is included in nep-cdm, nep-cta and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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https://mpra.ub.uni-muenchen.de/8520/1/MPRA_paper_8520.pdf revised version (application/pdf)

Related works:
Journal Article: Ideological uncertainty and lobbying competition (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:6992

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