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Politician preferences and caps on political lobbying

Author

Listed:
  • Ivan Pastine
  • Tuvana Pastine
Abstract
This paper extends Che and Gale (1998) by allowing the incumbent politician to have a preference for the policy position of one of the lobbyists. The effect of a contribution cap is analyzed where two lobbyists contest for a political prize. The cap always helps the lobbyist whose policy position is preferred by the politician no matter whether it is the high-valuation or the low-valuation contestant. In contrast to Che and Gale, once the cap is binding a more restrictive cap always reduces expected aggregate contributions. However, the politician might support the legislation of a barely binding cap. When politician policy preferences perfectly reflect the will of the people, a more restrictive cap is always welfare increasing. When lobbyist’s valuations completely internalize all social costs and benefits, a cap is welfare improving if and only if the politician favors the high-value policy. Even a barely binding cap can have significant welfare consequences.

Suggested Citation

  • Ivan Pastine & Tuvana Pastine, 2006. "Politician preferences and caps on political lobbying," Working Papers 200619, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:200619
    as

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    File URL: http://hdl.handle.net/10197/700
    File Function: First version, 2006
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    References listed on IDEAS

    as
    1. repec:bla:jindec:v:50:y:2002:i:4:p:417-30 is not listed on IDEAS
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    All-pay auction; Campaign finance reform; Explicit ceiling; Political campaigns--Mathematical models; Campaign funds; Noncooperative games (Mathematics);
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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