Changes
Jump to navigation
Jump to search
→A.2: Lobbying and policy choice
<math>V_i(x) - f_i - c_i\,</math>
with <math>V_1 = - x^2 + 1\,</math>, and <math>V_2 = -x^2 + 2x\,</math>. Note the fixed costs are a waste in that the policymalcer policymaker does not benefit from them (nor does anyone else).
The timing of interaction in this society is as follows. 1) Both interest groups decide, simultaneously and noncooperatively, whether to organize. 2) The organization decisions become known to everyone, and whomever is organized makes contributions <math>c(x)\,</math> to the policymaker in the form of a schedule of contributions contingent on the policy that is finally chosen. If both groups are organized, contributions are made simultaneously and noncooperatively, and you should assume that a Truthful Nash equilibrium is played. 3) Knowing the contributions offered, the policymaker selects policy. All payoff functions and the structure of the interaction are common knowledge.
