The Effectiveness of Caps on Political Lobbying

M. Matejka, A.M. Onderstal, A.M.B. De Waegenaere

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Abstract

In this paper, we analyze a lobby game, modelled as an all-pay auction in which interest groups submit bids in order to obtain a political prize.The bids are restricted to be below a cap imposed by the government.For both an incomplete and a complete information setting we show the following results. While ex post a lower cap may lead to higher lobbying expenditures, ex ante a lower cap always implies lower expected total lobbying expenditures.The incompletely informed government maximizes social welfare by implementing a cap equal to zero.
Original languageEnglish
Place of PublicationTilburg
PublisherAccounting
Number of pages25
Volume2002-44
Publication statusPublished - 2002

Publication series

NameCentER Discussion Paper
Volume2002-44

Fingerprint

Lobbying
Bid
Government
Expenditure
Complete information
Lobbies
All-pay auction
Interest groups
Social welfare

Keywords

  • lobbying
  • auctions
  • game theory

Cite this

Matejka, M., Onderstal, A. M., & De Waegenaere, A. M. B. (2002). The Effectiveness of Caps on Political Lobbying. (CentER Discussion Paper; Vol. 2002-44). Tilburg: Accounting.
Matejka, M. ; Onderstal, A.M. ; De Waegenaere, A.M.B. / The Effectiveness of Caps on Political Lobbying. Tilburg : Accounting, 2002. (CentER Discussion Paper).
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Matejka, M, Onderstal, AM & De Waegenaere, AMB 2002 'The Effectiveness of Caps on Political Lobbying' CentER Discussion Paper, vol. 2002-44, Accounting, Tilburg.

The Effectiveness of Caps on Political Lobbying. / Matejka, M.; Onderstal, A.M.; De Waegenaere, A.M.B.

Tilburg : Accounting, 2002. (CentER Discussion Paper; Vol. 2002-44).

Research output: Working paperDiscussion paperOther research output

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T1 - The Effectiveness of Caps on Political Lobbying

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AU - Onderstal, A.M.

AU - De Waegenaere, A.M.B.

N1 - Pagination: 25

PY - 2002

Y1 - 2002

N2 - In this paper, we analyze a lobby game, modelled as an all-pay auction in which interest groups submit bids in order to obtain a political prize.The bids are restricted to be below a cap imposed by the government.For both an incomplete and a complete information setting we show the following results. While ex post a lower cap may lead to higher lobbying expenditures, ex ante a lower cap always implies lower expected total lobbying expenditures.The incompletely informed government maximizes social welfare by implementing a cap equal to zero.

AB - In this paper, we analyze a lobby game, modelled as an all-pay auction in which interest groups submit bids in order to obtain a political prize.The bids are restricted to be below a cap imposed by the government.For both an incomplete and a complete information setting we show the following results. While ex post a lower cap may lead to higher lobbying expenditures, ex ante a lower cap always implies lower expected total lobbying expenditures.The incompletely informed government maximizes social welfare by implementing a cap equal to zero.

KW - lobbying

KW - auctions

KW - game theory

M3 - Discussion paper

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BT - The Effectiveness of Caps on Political Lobbying

PB - Accounting

CY - Tilburg

ER -

Matejka M, Onderstal AM, De Waegenaere AMB. The Effectiveness of Caps on Political Lobbying. Tilburg: Accounting. 2002. (CentER Discussion Paper).