
handle: 10230/27294 , 10447/265051 , 1814/59591
How can a small special interest group successfully get an inefficient transfer at the expense of a much larger group with many more resources available for lobbying? We consider a simple model of collusive organizations that provide a public good in the form of effort and have a fixed cost per member of acting collusively. Our key result is that the willingness of such a group to pay for a/ngiven prize depends on whether the prize is fungible - that is, whether the prize can be used to pay for itself. If the prize is fungible, as in the case of a transfer payment, a smaller group always has an advantage. If the prize is non-fungible - civil rights for example - willingness to pay first increases then decreases with the size of the group. We use the theory to study agenda setting/nboth with and without blackmail by the politician showing that in general the small group is not too greedy: when it wins it optimally chooses to pre-empt the large group by choosing a prize small enough to equal the large group participation cost. The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
Collusion, Group, Public good, Collusion; Group; Organization; Public good; Economics and Econometrics; Political Science and International Relations, Organization
Collusion, Group, Public good, Collusion; Group; Organization; Public good; Economics and Econometrics; Political Science and International Relations, Organization
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