Centralized Decision Making and Informed Lobbying

Abstract : We address the trade-off between centralized and decentralized decision making subject to influence from privately informed lobbies. We focus on informative equilibria with separating differentiable contribution schedules and identify an information transmission effect under centralized structures. Such effect decreases capture and increases welfare when lobbies have "aligned preferences." The opposite effect holds for "polarized preferences." We present two examples of this framework: local public goods and customs union agreements. Finally, we compare the policy outcomes from this political economy perspective to those under a normative mechanism design approach, and extend our analysis to the discussion of pooling equilibria.
Document type :
Journal articles
Complete list of metadatas

https://hal-pjse.archives-ouvertes.fr/hal-01631111
Contributor : Caroline Bauer <>
Submitted on : Wednesday, November 8, 2017 - 4:49:43 PM
Last modification on : Tuesday, March 26, 2019 - 3:45:44 PM

Links full text

Identifiers

Collections

Citation

Rafael Costa Lima, Humberto Moreira, Thierry Verdier. Centralized Decision Making and Informed Lobbying. American Economic Journal: Microeconomics, American Economic Association, 2017, 9 (4), pp.324-355. ⟨10.1257/mic.20150253⟩. ⟨hal-01631111⟩

Share

Metrics

Record views

432