Publication detail

Access fees for competing lobbies

Author(s): doc. PhDr. Martin Gregor Ph.D.,
Type: IES Working Papers
Year: 2014
Number: 22
Published in: IES Working Papers 22/2014
Publishing place: Prague
Keywords: informational lobbying, access fee, persuasion, verifiable evidence
JEL codes: C72, C78, D72, D83
Suggested Citation: Gregor M. (2014). “Access fees for competing lobbies” IES Working Paper 22/2014. IES FSV. Charles University.
Grants: DYME – Dynamic Models in Economics
Abstract: We model `money buys access' informational lobbying as a commitment from the policy-maker to observe a lobby's verifiable evidence only upon receiving an access fee. We specifically examine the policy-maker's optimal access fees in the presence of two strictly competing lobbies. Our novel method constructs bargaining surpluses in parallel bilateral bargaining problems in which a negative sign for the bilateral surplus implies a strategic access restriction. This approach easily identifies the equilibrium set of participating lobbies for any information structure and any timing for the lobbies' access. We explain the incomplete participation of lobbies and the resulting information and welfare distortion using the information and revenue complementarities of signals. We also show that a lower bias may be either a blessing or curse for a lobby depending on the information structure and timing. Finally, we demonstrate that promoting lobbying competition may be detrimental to welfare due to the policy-maker's revenue-information tradeoff.
Downloadable: wp_2014_22_Gregor




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