Politician preferences and caps on political lobbying

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Title: Politician preferences and caps on political lobbying
Authors: Pastine, Ivan
Pastine, Tuvana
Permanent link: http://hdl.handle.net/10197/700
Date: Nov-2006
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.
Type of material: Working Paper
Publisher: University College Dublin. School Of Economics
Copyright (published version): 2006 School Of Economics, University College Dublin
Keywords: All-pay auctionCampaign finance reformExplicit ceiling
Subject LCSH: Political campaigns--Mathematical models
Campaign funds
Noncooperative games (Mathematics)
Other versions: http://www.ucd.ie/economics/research/papers/2006/WP06.19.pdf
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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