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Ideological Uncertainty and Lobbying Competition

Author

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  • Martimort, David
  • Semenov, Aggey
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.

Suggested Citation

  • Martimort, David & Semenov, Aggey, 2008. "Ideological Uncertainty and Lobbying Competition," MPRA Paper 6992, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:6992
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Lobbying Competition; Common Agency; Asymmetric Information; Contributions;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

    NEP fields

    This paper has been announced in the following NEP Reports:

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