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Tacit Lobbying Agreements: An Experimental Study

Author

Listed:
  • Großer, Jens

    (Florida State University)

  • Reuben, Ernesto

    (New York University, Abu Dhabi)

  • Tymula, Agnieszka

    (University of Sydney)

Abstract
We experimentally study the common wisdom that money buys political influence. In the game, one lobbyist has the opportunity to influence redistributive tax policies in her favor by transferring money to two competing candidates. The success of the lobbying investment depends on whether or not the candidates are willing to respond and able to collude on low-tax policies that do not harm their relative chances in the elections. In the experiment, we find that lobbying is never successful when the lobbyist and candidates interact just once. By contrast, it yields substantially lower redistribution in about 40% of societies with finitely-repeated encounters. However, lobbying investments are not always profitable, and profit-sharing between the lobbyist and candidates depends on prominent equity norms. Our experimental results shed new light on the complex process of buying political influence in everyday politics and help explain why only relatively few corporate firms do actually lobby.

Suggested Citation

  • Großer, Jens & Reuben, Ernesto & Tymula, Agnieszka, 2010. "Tacit Lobbying Agreements: An Experimental Study," IZA Discussion Papers 5332, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5332
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    References listed on IDEAS

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    More about this item

    Keywords

    bargaining; elections; redistribution; lobbying; collusion;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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