|Author:||Bc. Michal Prause|
|Year:||2015 - summer|
|Leaders:|| doc. PhDr. Martin Gregor Ph.D.
|Work type:|| Bachelors
|Awards and prizes:|
|Abstract:||We consider how the shape of the decision maker’s objective a↵ects the pay-toplay
lobbying model with the decision maker as a discriminatory price setter.
First, we summarize the important characteristics of two instruments of lobbyists,
contributions and information. We then place the theme of pay-to-play
lobbying with endogenous access fees within the context of general lobbying
literature as well as the narrower access-lobbying literature. Next, we augment
the model used in Cotton (2012) and Gregor (2015) and introduce a new policy
function to the model, which allows us to analyze the robustness of the main
conclusions from the two papers, i.e. the curse of the ex ante advantage and
the destruction of the lobbying industry as a result of endogenous private devaluations.
We test the robustness of both phenomena with regard to decision
maker’s objective and find that (i) the relative sizes of the ex ante utilities
do not always completely determine the ex post expected utilities and (ii) the
introduction of endogenous private valuations can produce equilibria where the
destruction of private values does not occur. In the last section we generalize
our findings and introduce a necessary and su"cient condition for the existence
of equilibrium devaluation.