Reform for Sale (Paperback)

Perrin Lefebvre

ISBN 10: 1009285580 / ISBN 13: 9781009285582

Published by Cambridge University Press, Cambridge, 2023

About this Item

Paperback. 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. This Element focuses on the efforts of interest groups who try to to influence a policy-maker who in turn exerts effort to increase the probability that a reform be implemented. It analyzes linking of the allocative efficiency and redistribution of the aggregate surplus, as both depend on the set of active principals as well as on the group size. This item is printed on demand. Shipping may be from our UK warehouse or from our Australian or US warehouses, depending on stock availability.

Seller Inventory # 9781009285582

Bibliographic Details

• Title: Reform for Sale (Paperback)
• Publisher: Cambridge University Press, Cambridge
• Publication Date: 2023
• Language: English
• ISBN 10: 1009285580
• ISBN 13: 9781009285582
• Binding: Paperback
• Condition: new

About this title

Synopsis

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.