Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/120426
Authors: 
Gregor, Martin
Year of Publication: 
2014
Series/Report no.: 
IES Working Paper 22/2014
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.
Subjects: 
informational lobbying
access fee
persuasion
verifiable evidence
JEL: 
C72
C78
D72
D83
Document Type: 
Working Paper
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