Reform for Sale

Reform for Sale

EnglishPaperback / softbackPrint on demand
Lefebvre, Perrin
Cambridge University Press
EAN: 9781009285582
Print on demand
Delivery on Thursday, 28. of November 2024
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Detailed information

Lobbying competition is viewed as a delegated common agency game under moral hazard. Several interest groups try to influence a policy-maker who exerts effort to increase the probability that a reform be implemented. With no restriction on the space of contribution schedules, all equilibria perfectly reflect the principals' preferences over alternatives. As a result, lobbying competition reaches efficiency. Unfortunately, such equilibria require that the policy-maker pays an interest group when the latter is hurt by the reform. When payments remain non-negative, inducing effort requires leaving a moral hazard rent to the decision maker. Contributions schedules no longer reflect the principals' preferences, and the unique equilibrium is inefficient. Free-riding across congruent groups arises and the set of groups active at equilibrium is endogenously derived. Allocative efficiency and redistribution of the aggregate surplus are linked altogether and both depend on the set of active principals, as well as on the group size.
EAN 9781009285582
ISBN 1009285580
Binding Paperback / softback
Publisher Cambridge University Press
Publication date March 2, 2023
Pages 75
Language English
Dimensions 229 x 152 x 5
Country United Kingdom
Readership General
Authors Lefebvre, Perrin; Martimort David
Illustrations Worked examples or Exercises
Series Elements in Law, Economics and Politics