Abstract
This paper presents a dynamic model on lobbying. The interactions between two competing lobbies, who attempt to influence regulations and legislation, are modelled as a differential game. We consider for this game first a time consistent and then a subgame perfect equilibrium (in linear Markov strategies). The subgame perfect equilibrium lowers considerably lobbying activity and expenses. This provides a partial explanation of the puzzle that rent-seeking expenses are often small compared with the prize sought.
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The author acknowledges helpful comments from an anonymous referee.
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Wirl, F. The dynamics of lobbying — A differential game. Public Choice 80, 307–323 (1994). https://doi.org/10.1007/BF01053223
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DOI: https://doi.org/10.1007/BF01053223