Lobbying and asymmetric information

Informational lobbying — the use by interest groups of their (alleged) expertise or private information on matters of importance for policymakers in an attempt to persuade them to implement particular policies — is often regarded as an important means of influence. This paper analyzes this phenomenon in a game setting. On the one hand, the interest group is assumed to have private information which is relevant to the policymaker, whilst, on the other hand, the policymaker is assumed to be fully aware of the strategic incentives of the interest group to (mis)report or conceal its private information. It is shown that in a setting of partially conflicting interests a rationale for informational lobbying can only exist if messages bear a cost to the interest group and if the group's preferences carry information in the ‘right direction’. Furthermore, it is shown that it is not the content of the message as such, but rather the characteristics of the interest group that induces potential changes in the policymaker's behavior. In addition, the model reveals some interesting results on the relation between, on the one hand, the occurrence and impact of lobbying and, on the other hand, the cost of lobbying, the stake which an interest group has in persuading the policymaker, the similarity between the policymaker's and the group's preferences, and the initial beliefs of the policymaker. Moreover, we relate the results to some empirical findings on lobbying. qu]Much of the pressure placed upon government and its agencies takes the form of freely provided “objective” studies showing the important outcomes to be expected from the enactment of particular policies (Bartlett, 1973: 133, his quotation marks). qu]The analysis here is vague. What is needed is an equilibrium model in which lobbying activities have influence. Incomplete information ought to be the key to building such a model that would explain why lobbying occurs (information, collusion with decision makers, and so on) and whether lobbying expenses are socially wasteful. (Tirole, 1989: Ch. 1.3, p. 77, Rentseeking behavior).     

Revealed preferences for public goods: Applying a model of voter behavior

Most analyses of preferences for government-supplied goods disregard the fact that in a democratic society, these preferences are revealed by an individual choice: the vote. In this paper this is taken account of in a model, explaining the dynamics in voting behavior in a multi-party system. The model assumes that voters may be categorized into K groups of individuals, pursuing the same interests, who remember how parties do in representing these interests (given the level to which they are held responsible for government policy). The model allows one to estimate party identification, sensitiveness to economic performances, time preference, and relative preferences for public versus private goods, all for each of the groups. Furthermore, the model allows for an estimation of the level to which various parties are held responsible for government policies.An empirical application of the model to the Netherlands is presented, albeit that data restrictions did not allow a distinction of more than one group. The results in terms of significance of the coefficients as well as the interpretation of the original parameters are promising. The two main conclusions are that the relative preference for private versus collective consumption is lower than the existing ratio in the Netherlands, and that two parties forming a government coalition are not held equally responsible for the policies.     

The interaction between economics and politics: modelling cycles

Abstract. In this article simulation results are used to analyze the capacity of a general politico-economic model, developed by one of the authors, to generate cycles of various lengths. The model describes behaviour of individuals and organizations in the economic as well as the political sphere. The interaction between both spheres gives rise to short term (business) cycles as well as long term (Kondratieff) cycles. The analyses concentrate on the effect variations in the political sector (regarding, e.g., party identification on non-economic grounds, the sensitivity of voters, and the discount parameter for past economic results) have on the cycles found.     

Choosing free trade without amending the U.S. Constitution

This paper documents the functioning of the market in trade protection. It uses a narrative approach to demonstrate that politicians respond to the demands of special interests by forcing open foreign markets and by closing domestic markets. In the process government officials violate property rights, disregard economic logic, damage the world trading system, multiply rent-seeking costs, and destroy wealth. Such outcomes imply that there is a constitutional failure, and that the rules and institutions governing international trade need to be reformed. This paper discusses several such changes and considers how consumers could be mobilized to support them.     

Evaluating prediction of technology transfer success: An interim evaluation of the dutch sensor technology program

Technology Foundation STW, a grant organization in the Netherlands, selects research proposals from universities on the basis of their scientific quality and their utilization potential. The proposals are in the field of applied science. STW also assists the research groups in the four years after the grant by bringing together the researchers and the potential users in half-day meeti gs twice a year at the university concerned. STW seeks methods to relate the differences in the research outcomes (“evaluation after”) to the differences in assessment rankings (“evaluation before”). This study will focus on the evaluation of a sensor technology program managed by STW as a subset of the larger set of all research projects funded by STW. We go back to the most basic and simple definition of utilization of outcome, namely whether the research results were or were not used by parties outside the university. This simple basis gives surprisingly positive results. First, it does indeed seem that for STW as a whole, the assessment beforehand is a predictor of the chance that the results will be used later. But this does not seem to be true as far as the subset of sensor technology projects is concerned. These findings can help us obtain more insight into what our selection process does and into what determines the success rate in terms of utilization six years after the research has ended.     

A computational electoral competition model with social clustering and endogenous interest groups as information brokers

We extend the basic model of spatial competition in two directions. First, political parties and voters do not have complete information but behave adaptively. Political parties use polls to search for policy platforms that maximize the probability of winning an election and the voting decision of voters is influenced by social interaction. Second, we allow for the emergence of interest groups. These interest groups transmit information about voter preferences to the political parties, and they coordinate voting behavior. We use simulation methods to investigate the convergence properties of this model. We find that the introduction of social dynamics and interest groups increases the separation between parties platforms, prohibits convergence to the center of the distribution of voter preferences, and increases the size of the winning set.     

Psychotic versus non-psychotic firesetters: similarities and differences in characteristics

Firesetters with psychotic disorders constitute a distinct and important offender group. However, little is known about how psychotic firesetters differ from non-psychotic firesetters. More knowledge is required in order to treat this particular population effectively. Psychotic (n?=?30) and non-psychotic (n?=?94) firesetters of both sexes referred for pre-trial forensic mental health assessment in the Netherlands were compared on socio-demographic, pathological, judicial and event-related characteristics using binary and multivariate statistical tests. Results showed that psychotic firesetters were older, single and unemployed. They had a more extensive history of mental health problems, associated drug use and impaired self-reliance. Opposed to non-psychotic offenders, physical abuse in childhood and alcohol abuse were less prevalent. They had a more extensive history of prior convictions, committed the arsons more often alone and were less often intoxicated. Treatment implications are discussed as focusing treatment on these differences may contribute to treatment efficacy and prevention of recidivism.