Abstract
This note amends the model of informational lobbying presented in Potters and van Winden (Public Choice 74:269–292, 1992). In the original article, the authors find that only separating and pooling equilibria exist when the cost of lobbying is intermediate and the policymaker’s prior favors the interest group’s preferred policy. However, we prove that a semi-separating equilibrium also exists under these conditions. Implications for lobbying behavior are discussed.
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Notes
Potters and van Winden consider sending a message m∈M from a set of possible alternatives. However, they show in Lemma 1 that in equilibrium only one type of message, denoted m ∘, is sent.
See Proposition 2 of the original article. When p<α and c<b 1<b 2, the unique equilibrium (LE1) is semi-separating. However, when b 1<c<b 2, the unique equilibrium (LE2) is fully separating.
References
Potters, J., & van Winden, F. (1992). Lobbying and asymmetric information. Public Choice, 74, 269–292.
Acknowledgements
We thank Adam Meirowitz and Kris Ramsay for helpful comments. Joan acknowledges the Ibercaja Research Fellowship Program (Programa de becas Ibercaja de investigación) for support.
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This material is based upon work supported by the National Science Foundation Graduate Research Fellowship under Grant No. DGE-1147470.
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Weinreb, J., Ricart-Huguet, J. A correction to Potters and van Winden (1992). Public Choice 159, 23–26 (2014). https://doi.org/10.1007/s11127-012-0010-5
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DOI: https://doi.org/10.1007/s11127-012-0010-5